Foreigners working in Guangzhou will be required declare the
details of their personal income taxes starting next month.
The Guangzhou Local Taxation Bureau, working to cut down on tax
evasion and beef up tax collection, this week implemented a system
directing all enterprises employing foreigners to set up a file for
each foreign worker, whether he or she works on a short-term or
long-term basis.
The enterprises must note who the company, agency or an
individual pays for the foreign worker's income taxes.
The move comes after an order by the State Administration of
Taxation (SAT) earlier this year, which requires local tax
departments nationwide to establish a personal information system
for foreigners.
Every foreigner working in companies, social organizations or
government departments should have a file, the SAT said.
"The practice is well under implementation, and the personal
income tax management system is taking shape," Luo Guiquan, deputy
director-general of the municipal local taxation bureau, told
China Daily.
The official said the system aims to help the city monitor and
administer the income taxes of foreigners who work in Guangzhou
precisely, making it harder for foreigners to evade payments.
Many foreigners pay taxes in full and on time, but others are
more reluctant or try to evade payments, he said.
In a recent special campaign checking foreigners' personal
income taxes among the foreign-funded enterprises and firms with
foreign employees in Guangzhou, the city's local taxation
authorities collected personal income taxes that should have been
levied, late fees and fines of over 36 million yuan (US$4.5
million) in 2005.
"Guangzhou's economy is foreign-oriented and Guangzhou has over
1,600 foreign-funded enterprises," he said.
"The personal income taxes of foreigners who work in Guangzhou
should have made a good contribution to the city's taxation."
Citing his recent studies, Ma Shizhao, an analyst with the
Guangdong Provincial Local Taxation Research Society, said only
about 30 percent of foreigners working in Guangzhou (excluding
those from Hong Kong and Macao) have declared their income
taxes.
And the problems of insufficient declaration or no declaration
of personal income tax are still serious in Guangzhou.
Citing the case in Guangzhou Development District, where many
foreign-funded enterprises are located, Ma said about 45 percent of
foreign employees declared their monthly income below 20,000 yuan
(US$2,500).
Most of them are middle-ranking managerial staff members and
their monthly income should be over 20,000 yuan, Ma said.
(China Daily May 30, 2006)
