"There is no such thing as a good tax.’" Winston Churchill

Many expatriates living and working in China today are becoming increasingly concerned over regulatory taxes which have been imposed by the government there. Equally, many feel that this is consolidating the tensions between local executives and expatriate executives which may already exist.

Expatriate executives have recently been hit hard by taxation laws whilst living and working in Mainland China according to EuroChinaJob.com. Interestingly many expatriates accept, and even agree with the taxes which are imposed on them for relocating to China however, some have argued that the compulsory taxation of foreign workers is unfair and reflects a prejudicial system. Moreover, several executives have conveyed their concern now that the taxes are increasing and retroactive payments are being imposed on executives who have been working in the country for more than a year.

In the same way, executives have suggested that making taxes between locals and expatriates the same would reflect a more equal system. Others have proposed that the new rules for retroactive taxation should be scrapped, as many feel that this is an unclear and even underhand way of indirectly collecting funds for the Chinese national social security system. This false representation appears to be the key issue for many executives.

Overall, it is not the taxation of foreign workers that appears to be the central concern for professionals working in China, but the misrepresentation of why expatriates are being taxed, the retroactive nature of the taxes, with some arguing they would not have relocated had they known, and what the funds are being used for. Many feel it is unjust to use taxes charged to expatriates to fund a social security system which they will never have access to. Moreover, it begs the question: for those who have relocated to China, when is enough enough? Is the price of living in China too high? 

This article was written by by Helen Langley of the Association of Executive Search Consultants (AESC).

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