Chinese taxes for the overseas translator

[889]

"with copies of the tax payment certificates that are issued by the China tax bureau (implying the concerns 889 raised aren't an issue)."

 

Of course you can! And you'll be home free unless the Revenue decides to audit you and realises you could have received a refund for the asking.

[Kenny同志]

I'm not sure paying the legally required taxes is robbery, Kenny.

 

 

There might be some confusion. What I meant to say was that those in the tax bureau were robbers of the government. 

 

I know every citizen is obligated to pay their taxes but the idea of giving 25% of my income to the government is crazy and ridiculous because unlike in many western countries, in China, I, as a freelancer, get almost nothing in return for all the taxes that I pay; I still have to pay for education, healthcare, and take out insurance for my old age. Ironically, employees, who are usually much better off than part-timers and freelancers, do not need to pay that much--far less in fact, and they only need to pay personal income tax when their monthly income exceeds 3,500 yuan.

 

Is there any obligation to declare overall annual income to the tax bureau though?

 

No idea.

[roddy]

Saga continues. After a few tax-free payments, they've come back and asked for 完税证明 from the UK so they can show the tax bureau that I am actually paying taxes on this income here. Problem with this is 

 

a) Income from the current tax year (April 2017-March 2018) doesn't need to be reported till Jan 2019 (that's the deadline, I could file as soon as the tax year's over, but what am I, a machine?)

b) I don't report individual bits of income, I report a total and pay a lump sum. There's no way to show a Chinese tax bureau I've paid tax on any specific bit of income, short of showing them my bank statements and proving I've not left anything out. And sod that, that's more info than the Inland Revenue ask for.

 

Would be interested to hear if anyone else is jumping through similar hoops.

[889]

You need to give them an official certificate declaring you are a UK resident for tax purposes.

 

This:

 

https://www.gov.uk/guidance/get-a-certificate-of-residence

[roddy]

I'd forgotten about those! Which is telling, as that's actually the correct document, and it's not been asked for. I've applied for one and hopefully the presentation of an official looking document will do the trick, but what they're currently asking for is proof that I've paid tax to the value of what they would have deducted*. It's been suggested I send in last year's 完税证明, but I'm not sending a document with useful financial information about me on it to a qq.com email address. Or a tax.gov.cn one. Yet. 

 

Thanks, 爸爸九。

 

*Which is nonsensical, as money is fungible. 

[roddy]

Latest email - "Those documents you said don't exist... can we get them by the end of the month?"

 

I feel sorry for the person I'm dealing with - I suspect she's a junior employee who's having to punch her way up the food chain through accounts and the tax bureau. Waiting on Certificate of Residence...

[Lu]

I'm amazed at your patience with them. From what I can see, none of this is or should be your problem. You did the work, now they need to pay you. Neither you nor they are the tax bureau, or responsible for anyone's taxes but their own.

[roddy]

Well, I have a fair amount of sympathy for them. The company won't have come up against this situation before. The tax bureau probably hasn't, and as far as I know this is one of those situations where there's national policy but no local implementation yet. If you're a counter clerk at the tax bureau, you're likely to be dubious about letting people off their taxes just on their own say so, and they can't be expected to know how things work over here.

 

I also have massive amounts of sympathy for me. I don't want to pay tax in China, but this is a client I'd like to keep. A "your problem, you sort it out" attitude isn't going to do me any favours - although it may yet come down to that.

[Kenny同志]

Roddy, have you ever thought about charging a higher rate so that the deduction won't affect the money you receive for the same volume of work?

[roddy]

Roddy's client, have you ever thought about using China-based translators who are less trouble and don't ask for more money to offset taxes they don't think they should be paying?

 

I might try that with a one-off client, this one seems to have longer-term potential, so it's worth ironing these issues out if possible.

 

[Kenny同志]

Fair enough. Good luck then. :-)

[889]

If you finally run into a brick wall on this, you can go the Competent Authority route in the UK under Article 25 of the Treaty. That is, you ask HMRC to work this out with the Chinese.

 

This is no simple or quick solution -- it's not like someone in London just picks up the phone for a chat with a counterpart in Beijing -- but you should be aware there is a way to ultimately resolve this.

 

(Keep in mind, though, that the problem may lie less with the Chinese tax people than in the way your client is presenting the issue.)

 

[roddy]

Quite possibly - I'm not sure what's coming back from the tax bureau and what's coming back from accounts at the client. 

 

The Competent Authority route is an amusing idea. 

[roddy]

Ok, this is what I've sent them, along with another line by line reading of the relevant articles ( 4 & 14) of the Convention. I wait to see on what basis this is rejected, but my current top three picks are:

• Failure to include any identifying alphanumeric sequences. Without a passport or ID number, how do they know I'm not some other person of that exact same name and address?
• "To the best of HMRC's knowledge"? Please provide proof of HMRC's omniscience (something the HMRC may well be willing to do). 
• "Call THAT a stamp? This is a stamp!" - official stamps "REJECTED DUE TO INADEQUATE STAMPAGE" across form.
• More realistically, a request it covers the relevant range of dates, rather than a single point in time.

[889]

Not to be too discouraging, but I suppose it's possible they'll want this legalised via the Chinese embassy, together with a properly certified translation.

 

In any event, Competent Authority is not without use, even in modest cases. When a foreign tax authority is being needlessly obstructive, especially at a low level, a casual mention that if there's no movement soon you're afraid you'll have to go the CA route may produce some action.

 

[roddy]

If they ask for anything more, bar a translation, I'm likely to give up or consult with the Competent Authority. This should not be an onerous process and in the same situation I'm sure the HMRC would take whatever China offers at face value. 

[roddy]

No joy from the tax bureau. What I got from the client is that as I didn't 提供您翻译费已经在贵国纳税的详细证明, they've had to pay the necessary and record it as a loss on their accounts. I'd imagine this does not amuse them. Their only suggestion is they 找税务所代开您的纳税证明提供给贵国 and I claim relief here - which looks possible, but then @889 says "And you'll be home free unless the Revenue decides to audit you and realises you could have received a refund for the asking"

[roddy]

After a lengthy webchat with an HMRC advisor, who did seem to know his stuff but was loathe to make any definite statements, it seems tax incorrectly paid in China does not earn credits back in the UK, you'd need to speak to the Chinese about getting that back. He gave me a number to call, which was for foreigners working in the UK. Got referred back to the general enquiries line.