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As a foreigner working in China, it is possible to deduct your living expenses in China from the monthly salary. Then the company can pay me direct compensation (tax-free) for my expenses. To do this I will need an official tax receipt, in China these are called “fapiao” (发票). It will also need to have my company name printed on them (except for transportation fapiao). The name needs to be exactly correct, even a missing parentheses will render them invalid.

Common China tax-exempt allowances
- Housing rental
- Car lease
- Education costs
- Home Leave (flight tickets etc)
- Medical Insurance
- Training
This all needs to be specified in the labour contract (as allowances).

In the past I have gotten a rental fapiao through my landlord but after moving to the new apartment I decided to handle it myself this time. Didn’t really have a lot of choice as the landlord don’t want to do it and I am not sure what fapiao my real estate agent might give me (fake fapiao’s are quite common).

So first thing first: Step 1 is to try to find out where to go to get a rental fapiao. Even this wasn’t that easy. I looked up the local district tax bureau office online and got the contact information and address. After 4 phone calls we finally got an address. Turns out I have to go to the 街道社区事务受理服务中心 (Residential Community General Affairs Service Center). This center provides a lot of different social services for locals. The center’s name also has the term 受理 that is a legal term meaning “accept and hear case”. So for my rental fapiao they will collect all my material and later the tax bureau will issue the fapiao.
The opening hours isn’t too great, weekdays 08.30 – 16.30, so it means I can only go there during work time.

After visiting the service center I got a paper slip listing all the required documents:

申请代开增值税发票时,应提供以下材料:
1,《代开增值税发票请表》;
2,不动产产权证明或商品房预售合同,房地产买卖合同等能证明不动产权属的复印件(首次办理时提供);
3,出租方身份证件原件及复印件;
4,私房出租合同原件及复印件(首次办理时提供);
5,出租方委托代理人申报的,应提供书面委托书及代理人的合法身份证明复印件;
6,承租方为个人的,提供个人身份证复印件;承租方为单位的,提供税务登记证或社会信用登记证(三证合一)复印件(首次办理时提供)

So i needed to have a letter of attorney from my landlord allowing me to handle issuing tax receipts. I found some templates online and re-wrote it for my case, then I had to met up with the landlord and let him sign the document. The landlord is officially the family’s son but I always deal with his mother. I guess they may have written the apartment on the son for tax reasons as there are limits on how many apartments a person can own without paying extra tax. The timing was lucky as the boy is back in Shanghai on summer holiday right now, he’s normally studying up in the north of China.

This is the documents I needed:
Landlord ID card (copy)
Ownership proof of the apartment (copy)
Rental contract (copy)
My company’s tax registration proof (copy)
Letter of attorney signed by the landlord and me (original)

Don’t really understand why I should sign a “letter of attorney” but that was the way it was done.

When making the application I had to fill in two forms in Chinese. After that I paid the tax (the tax was 3.33% for my rental amount, seems it varies depending on rental amount). I was really surprised I didn’t get any receipt after I had paid the tax! But three people all told me this is the normal procedure .. Instead I had to write my name and phone number in a notebook and the guy said he will call me when the tax slip is ready. He pointed at a big stack up documents and placed mine at the top, then said it will be about 2 weeks before he gets mine done. This is not so good for me, as it means I can’t get a fapiao ready for this month (it’s the 21st today). Obviously I had made a big mistake in assuming that I could get the fapiao the same day as I paid the tax. Btw they only accept cash, it is not possible to pay with a Chinese bank card.

When handing in the application I also need to choose which type of fapiao to issue. There are currently two types of fapiao’s in China – “common” and “special”. Just to clarify, in for example a restaurant you can choose between individual and company fapiao, but that is not related to “common” and “special” fapiao. Which type you should choose depends on your company’s tax paying status. China has undergone a VAT reform recently that will replace the business tax with a VAT. A company that is a small-scale tax payer uses “common fapiao 普通发票” and a general tax payer uses “special fapiao 专用发票”.

Now I will just have to wait for the phone call, and after that go and pick up the tax slip, then go to the local residence committee (居委会) and get it verified, and after that finally go to the tax bureau and issue a fapiao! Let’s hope it works. Overall one can only say that the process is really not that easy.

18 Aug update: I never received a phone call so I went back to the office and the tax fapiao was already ready for me to pick up. I asked if I don’t need to go to the local residence committee, but he (the same person as last time) said I don’t need to, which was the total opposite from what he told me before. I asked about the next time I want to get a fapiao, and he answered that I can get it very quickly next time, as he will print it out directly when I’m there. He said their system had some problem last month and that’s why it was so slow.


Posted: 21 Jul 2016