Wednesday, March 31, 2010

Working for the Company Off Hours

When you take a taxi, or go to a restaurant or buy something in China, you can get a receipt called fapiao (发票). It's not the regular bill that lists the items you bought or ordered, but a somewhat official looking document with a red printed stamp that only says the total amount of money spent and in most cases it says who the fapiao is addressed to. And if you're feeling lucky, you can scratch off a silver box that's sort of like a lottery. I have never figured out how that worked.

In my last workplace I was allowed to claim taxi fees as long as I handed in fapiao equal to the amount decided in my contract. That meant making sure I got a taxi receipt every time I took a cab.

I had to paste the fapiao onto pieces of paper which made it kind of like a primary school assignment complete with glue stick. Then I filled out a form with signatures and a few days later got the cash back.

In my current office, there are no such reimbursements.

Instead, the company here benefits at the expense of its employees, where they are expected to collect fapiao. I asked one of my colleagues what this was for, but she wouldn't give me a straight answer except that the monetary amount of the fapiao collected would be given back to the company in terms of subsidies or tax deductions, something like that. The mystery continues.

These fapiao could be almost any kind of receipts except for restaurants, and aside from taxi fapiao, had to be addressed to the company's formal name. Up until a month ago, all the Chinese employees were expected to turn in 2,000 yuan ($293) of fapiao -- bear in mind that they only make around 3,000 yuan a month in salary. Now after the Spring Festival, some of them have received slight raises and these days they have to turn in 2,500 yuan in fapiao.

If the government is looking for a way to boost domestic consumption, this is the way to do it. The staff here have to spend their hard-earned money so that their employer can get tax breaks or subsidies.

Those who live with their parents or husbands and wives can get access to their fapiao; those living on their own have to try to get these official receipts from everything they buy, including supermarkets and department stores.

And if employees don't turn in the 2,500 yuan in fapiao, they can't get their full salary.

Apart from the low wages, it sounds like the staff are getting an even shorter end of the stick.

The fapiao are collected so that the government knows the companies in question are paying their taxes, as every fapiao issued costs the company 5 percent in services charges. Which is why companies are reluctant to give them out so easily, and be able to declare less income, and thus less taxes.

Strange accounting methods, but it seems like that's how money goes around in China.


ks said...

every country has its own way of accounting. in canada it favors business people. friends of mine in real estate business always get my receipts at restaurant for them to claim as entertainment expenses for tax write off.

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