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A vexing Moment

"Yikes"

That was my first response to a November 9, 2006, story I stumbled across while reading People’s Daily Online headlined: “China’s High Earners to Report Income.”

The sinking feeling in my stomach deepened when I read words such as: “Employees earning more than 120,000 yuanˇanyone in Chinaˇmostly foreigners.”

“Oh no, that’s me!” I thought. My heart began racing. Beads of sweat formed on my forehead and I realized my jaws were aching from clenched teeth. “What does this mean?”

As I spiralled into uncertainty, I realized I had no idea how I get paid. Of course, I collect my pay as I always have in my five years in China, at the paymaster, but I realized I had no idea how my pay is derived or from which accounts it comes or how my taxes are collected, paid or spent.

But, wait a minute. My taxes are deducted by my danwei (work unit) before I’m paid. I always collect the net. That being the case, I went to my danwei’s paymaster and began making inquiries, but that turned out to be somewhat of a dead end.

My paymaster, through an interpreter, assured me that the correct amount had been deducted from my salary and that I had nothing to worry about. On the other hand, my paymaster did not know how or where I could report my taxes.

I returned to my desk as discussions about this strange new thing continued, a strange new thing that, unfortunately, my colleagues did not have to worry about, because even if they were laowai it will be quite some time before they see the lighter side of 120,000 yuan.

I tried to calm myself. Then I called my wife, who is Chinese, and asked her if she’d heard anything about this. She hadn’t. And since she’s an emerging artist, it will be some time before she sees the lighter side of 120,000 yuan either. She said she’d call my paymaster and check on the Internet, but when she called back she repeated what my interpreter had said and advised me to look on English-language Web sites to see if I could get more information. Nada (nothing).

I called a friend at China Daily who is familiar with such things, and he told me foreigners would have to pay, including the foreign experts there, but he said, “I think you can do it online. You don’t have to go down there.”

After I hung up, I wondered, “Where is there? Do I pay at the tax bureau in Chaoyang District where I live and work or in Chongwen District where my home office is? If I could do this online, where and how?” A return trip to my paymaster again elicited concern but no details.

I did learn that I wouldn’t have to approach this loathsome task until sometime in March 2007, so I began to take the advice to relax and forget about it. Then sometime around the Spring Festival, the hammer fell again in the form of a very official-looking letter from the Beijing Local Taxation Bureau pretty much confirming everything I’d read and wondered. It didn’t tell how to report taxes, but it did relate where: http://gs.tax861.gov.cn.

A call to the tax bureau by my wife and a confirmation from my paymaster revealed I could report my taxes online; they assured me I wouldn’t have to pay any additional taxes, something that had me scared to death.

But how much did I make in 2006? To this question, the paymaster said that number was on a slip of paper about 215 centimetres wide and about 5 centimetres high that I had been given at the first of the year.

“Don’t you remember it; don’t you have it?” she asked via an interpreter.

Man alive, I had no idea, but in stepped my brilliant wife, who having more sense than me, had filed it away somewhere.

As the deadline to report approached, we sat before the computer one evening and hooked up with the online tax bureau and began to fill out the form, but I realized I didn’t have my tax account number. I got that from the paymaster the next day, and that evening I completed the entire income tax reporting process in about the same amount of time it would take me to open an envelope containing my 1040 tax filing form in the United States. All that worry, all that concern turned out to be much ado about nothing.

Thankfully, I haven’t heard from the Beijing Local Taxation Bureau since, and I hope things stay that way.