Q: My previous employer was responsible for handling and submitting my tax payments. However, there appears to be a discrepancy, and unfortunately, the campus I was employed at has since shut down, and I have been unable to reach the company for clarification or support.

Following that role, I was employed by a new company where my salary was significantly lower — less than one-third of what I previously earned. Yet, I have been informed that I am still expected to pay the same amount of tax, which is confusing and seems inaccurate.

The total amount now owed is approximately 10,000 yuan, which I cannot afford to pay in one lump sum.

Is it possible to dispute this amount, as it appears to be due to my previous employer's failure to fulfil their tax obligations?

If a dispute is not possible, is there a way to apply for a payment plan — preferably spread across at least 3 months?

A:

1. If you are a foreign individual, you first need to determine whether you qualify as a resident individual. If you have a domicile in China or have no domicile but have resided in China for a cumulative period of 183 days within a tax year, you will be identified as a Chinese tax resident. If you have no domicile and don't reside in China, or have resided in China for less than 183 days within a tax year, you will be identified as a non-resident individual.

A tax year in China refers to the calendar year, from Jan 1 to Dec 31. An individual is considered to have a domicile in China if they habitually reside in China due to household registration, family ties, or economic interests.

Resident individuals who receive income from wages and salaries, remuneration for labor services, author's remuneration, or royalties must calculate their individual income tax on a consolidated basis over the tax year. When filing the annual tax reconciliation for comprehensive income, any excess tax paid will be refunded, and any shortfall will need to be paid.

Non-resident individuals receiving the aforementioned types of income must calculate individual income tax on a monthly or per-occurrence basis.

2. If you have any objections regarding the amount of tax declared by the withholding agent (your employer), you are advised to contact the withholding agent to verify the details. If there is an error in the declaration, the withholding agent can make the necessary corrections.

3. If a taxpayer is experiencing special difficulties and cannot pay taxes on time, they may apply for a deferral of tax payment with the approval of tax authorities at the provincial and municipal level. However, the deferral period may not exceed three months.

Given the complexity of your situation, please contact the competent tax authority for further assistance.

Here is a guide on tax service assistance that might be helpful.

Source: Shanghai Municipal Tax Service