Paying Taxes in China – Reprised

Taxes - Bang-Head HereI’m trying to be a good citizen or resident or businesswoman or whatever you want to call me.

I figure I use the things that tax money buys. I use the roads and the street lights at night. I use the parks and the heavily subsidized public transportation.

So I figure it’s only right that I ought to pay taxes.

Since avoiding paying taxes remains significantly easier than the act of actually paying taxes, I prefer not to pay.

It’s not that I have any problem with paying per se. Just with the system the Chinese government has put in place to process my payments. Most months, the amount of money they take from my bank account is vastly dwarfed by the cost of the amount of time wasted letting them know how much money they are supposed to take from my bank account.

There has to be an easier way than the current system. I’m not necessarily saying that it has to be the American way or the European way, just that it has to be not the way it’s currently being done. I sort of understand the reasoning behind how the fapiao system came to pass but that doesn’t make it an efficient or effective way for the government to collect payments.

In a primarily cash based society the formal receipt registering the transaction with the tax bureau makes sense. Being able to use the formal receipt that you’ve received from someone else to offset your taxes makes sense. However, the user unfriendly way in which things are currently being done does not make sense.

Lots of businesses give a discount if the customer or client doesn’t want a fapiao. I used to think this was just because they didn’t want to pay their taxes. As a taxpayer, I now realize that the discount reflects the amount of pointless effort that must be expended in an effort to pay taxes.

I acquired the right to give out handwritten fapiao sometime in the Autumn of 2011. Prior to having handwritten fapiao, I was going to the counter at the tax bureau to issue my fapiao. Every single time I was there, they flat out refused to admit that any kind of fapiao existed other than the machine printed ones I absolutely did not want to buy a dot matrix printer for. However, the accountant I had at the time knew the right questions to ask and I eventually got two books of 25.

Each fapiao was limited to CNY 999.99 per use. The full Chinese name of my company and the company I was providing services for had to be written in by hand. They had to be dated. They had to be stamped. They had to be signed. And most of the numbers had to be written in bank characters. A single stroke written incorrectly meant the fapiao had to be discarded.

Anti counterfeit measures notwithstanding, I fucking hate bank characters.

零, 壹, 贰, 叁, 肆, 伍, 陆, 柒, 捌, 玖, 拾

To further add to the unpleasantness, it was a book of carbons and if you forgot to put the piece of cardboard between the correct sheets of paper you ended up getting marks on the wrong sheet and those sheets had to be thrown out. But they cost me nothing. And I knew from the training session I’d gone to on the Simple Online Tax Paying System that the computer software was easily as frustrating, required I have a Chinese OS computer to run it, and needed a dot matrix printer.

So handwritten fapiao it was.

About six or seven months after I started using them, I found out about my company’s eligibility to have pre-printed fapiao. Going to the tax bureau and getting things changed was way too much trouble and I didn’t change over until after I hired a personal assistant in October of 2012.

My new assistant passionately hated the handwritten fapiao. I totally understand this. It doesn’t matter what their native language is, most people who have grown up using computers dislike writing by hand. Furthermore, as a native speaker, it had to be humbling to discard multiple receipts per fapiao-writing session because a character was written wrong.

His going to the tax bureau to deal with getting me pre-printed fapiao was one of the early highlights of employing him. I tried not to take pleasure at his obvious discomfort but I could have been the one doing it and I wasn’t. I didn’t have to run all over the city to multiple offices. I didn’t have to deal with no one in the government being open to the public on Friday afternoons. I didn’t have to fill out forms.

For a brief while I had pre-printed fapiao and handwritten fapiao at the same time. But then, one day, when Jimmy, said assistant, went to pick up two new booklets of 25 (given our mutual writing by hand issues about CNY 40,000 in receipts), they said “sorry, no more booklets”. And the day after that. And the day after that. And the day after that. At which point they finally admitted that they had no idea when they were going to get new booklets.

At that time, I was allowed CNY 10,000 in pre-printed receipts. No particular reason why. That’s just how many they gave the first time and I needed to apply for approval to pick up more than 10,000 at one time. Of course, the week that I permanently ran out of handwritten receipts was also the week that I needed more than twice my allotment of pre-printed receipts.

We only used the pre-printed receipts for 4 or 5 months. It wasn’t too bad when they gave them to us in denominations of 1, 5, 10, 20, 50, and 100. Once they stopped giving pre-printed CNY 100 receipts to service companies in Haikou, however, it looked like I was going to be forced to enroll in the Simple Online Tax Paying System. Giving 600 individual pre-printed slips of paper to a client is a little bit tacky.

So I finally enrolled in the Simple Online Tax Paying System. If I bring my Chinese language laptop over to his office, I’ve got a friend who will let me use his Fapiao Printer. I could buy my own Fapiao Printer. The CNY 1000 price tag on the recommended fapiao specific printer isn’t that horrible and CNY 150 I could spend on a normal dot
matrix printer from taobao is even better. That having been said, I simply flat out refuse to regress to a technology my family stopped using in the late 80s.

I didn’t realize this at the time I attended the training course two years ago but the software for the Simple Online Tax Paying System is optimized to run on Windows 95.

I spent about two hours setting up my old laptop to run the software. I downloaded things from the Tax Bureau’s website. I configured things on my laptop. I reconfigured things.  Not all of this was their fault, other than re-installing the operating system with a Chinese version of Windows, I haven’t used my old laptop since I got my new one and there were lots of things missing.

I really try not to take delight in the pain and suffering of others but it’s so immensely gratifying when I’ve given up on something frustrating with a bank or the government and, after handing it over to Jimmy, get to hear him muttering under his breath and cursing at the computer screen. I especially like the expressions he makes when he’s on the phone with a “helpful” individual.

That was on Friday.

By Monday afternoon, it was set up and my first batch of printed fapiao were issued. Right now, however, I’m limited to CNY 1000 per sheet of paper. We have to fill out an application form asking for permission to write larger value fapiao.

Pardon me while I go bash my head against the wall now.


This is Marian’s second “Paying Taxes” post. For the first, click here.

Talk on Paying Taxes in China – Reprised


4 Comments
  1. Marian did you know that as a US citizen living abroad you also are supposed to be filing tax returns to the IRS every year and paying taxes on you Chinese profits to USA? Also supposed to give IRS all your foreign bank account numbers and reveal any kind of financial holdings. USA is much worse than China when it comes to aggressive taxation.. I wonder how many Americans in China actually do file their US tax forms every year.

    • After a few years of being below the minimum threshold required to file, I stopped filing for a while but now that I’m a business owner, I’m filing again.

      Whether it is China or the US, the tax rate itself isn’t that big of an issue. Like I said at the beginning of the article – I use the things taxes pay for. It’s only right that I make a contribution.

      The problem is the pointless paperwork and unnecessary difficulty involved in filing Chinese taxes that annoys me.

      Even with a relatively low hourly rate of pay, an accountant, and lots of experience at how the Chinese tax system works, between my expenses and those of my clients it costs about 3元 in wasted time and effort to pay 1元 in tax.

  2. At the end of the month, the restaurant claims a tax refund on any remaining fapiao. As a result, fapiao are basically as good as money to the restaurant; hence, the fapiao are printed on watermarked paper with anti-counterfeiting measures, and employ serial numbers you can validate by sending an SMS to a government hotline. Also, restaurants have a strong incentive to omit a few fapiao from your stack, or completely forgo giving you the fapiao (they love it when foreigners dine, because they don’t know about fapiao — they get big business and they get the tax refund on it!).

Leave a Reply

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>

Return to Top ▲Return to Top ▲