The International Schools Review Forum

Hi- I am curious as to what the "word on the street" is in regards to the change in the Chinese tax law on foreigners. I know that several schools pay all or part of a teacher's Chinese taxes as part of hiring package. Is that changing? Any specific examples that people can share?

Thanks - Gina

My school continues to foot the bill, of approximately $5,000,000/year.

Cant really help you Ive had about an equal number of replies, some schools are just passing the taxes on to their teachers, and some schools seem to be absorbing the extra taxes. Its about evenly split, and there isnt any real pattern. The high tier schools are just as likely to absorb the tax as the lower tier schools.

One comment was that the tier 1 schools pay more and so have a higher tax, and combined with all their staff its a significant amount of money to write off as an expense. Another comment I heard was that they didnt know what the school paid and didnt pay, and believed the school could easily be under reporting and under paying their taxes anyway.

[quote="PsyGuy"]Cant really help you Ive had about an equal number of replies, some schools are just passing the taxes on to their teachers, and some schools seem to be absorbing the extra taxes. Its about evenly split, and there isnt any real pattern. The high tier schools are just as likely to absorb the tax as the lower tier schools.

One comment was that the tier 1 schools pay more and so have a higher tax, and combined with all their staff its a significant amount of money to write off as an expense. Another comment I heard was that they didnt know what the school paid and didnt pay, and believed the school could easily be under reporting and under paying their taxes anyway.[/quote]

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In Beijing it seems that the schools that were already paying your taxes are also covering the new tax and those that weren't, aren't.

I was also just told that in Shanghai they are still stalling and not paying the new tax yet (but can't say that it applies to all schools).

@wrldtrvlr123

Do you have any insight how this will effect new teachers next year? Will they revise policies to pass the tax on to new teachers, or all teachers, or do you think it will just become a new expense and expectation of schools to absorb the new tax costs?

When do you think other cities and towns will catch up on the tax issue. My understanding is that a number of smaller cities have not implemented the new tax requirements?

I will be a new teacher in Shanghai and was told (in writing as part of the contract) that the school will absorb the cost of the new tax once it is implimented. Of course, that does not mean all schools will handle it the same way.

[quote="PsyGuy"]@wrldtrvlr123

Do you have any insight how this will effect new teachers next year? Will they revise policies to pass the tax on to new teachers, or all teachers, or do you think it will just become a new expense and expectation of schools to absorb the new tax costs?

When do you think other cities and towns will catch up on the tax issue. My understanding is that a number of smaller cities have not implemented the new tax requirements?[/quote]
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I don't really know how this is going to go. There is a lot of conflicting information/opinions on the subject.

The impact for teachers is significant but not horrendous (1000 rmb a month give or take) but is really worrying the schools that have implemented it as they have to match 30% or so of the teacher's salary for mandatory contributions. I can't help but think this will get passed onto the families. Will it make schools tighten up on teacher benefits? Hard to say but will depend on how enrollment etc goes.

I think some places may be waiting to see what happens in Shanghai and Beijing (those who are paying, those who aren't). I'm sure there is much lobbying going on behind the scenes.

I usually have a good insight on issues, but ive had too many conflicting reports over the last couple months.