Relocating to China? You will need to know…what is a FA PIAO?
Every year a new influx of non-Chinese expatriates are relocating into
China. Each of these newcomers will at sometime along the way come
across a surprising term. The "fa piao"
(
)!
To the unsuspecting ear, this seems like a word that belongs inside an
exclamation dialogue box in a Chinese Batman comic book. However, far
from being an expletive for pain, fa piao simply means “official
receipt”.
The fa piao system is used by Chinese tax authorities to calculate and
collect business taxes. A fa piao is provided by businesses to
consumers for the amount of services or goods rendered much like a
receipt.
However, there are some big differences between a receipt and a fa piao:
- Fa piao are issued in denominations, like currency
- Fa piao also generally do not itemize what the purchase was for
- Some
stores that deal a lot with expatriates will issue a receipt, others
will only give a fa piao. Some will provide both, and a few will not
give either (avoid those places)!
- Fa piao sometimes
include scratch off panels concealing authentication passwords that can
be redeemed for prizes in a lottery format (the Chinese government has
been creative in pushing the use of the fa piao to reduce tax evasion)
These differences obviously present problems for expatriates who need to submit receipts for goods or services purchased.
The best practice is to always ask for your own fa piao. Expatriates
are encouraged, just like Chinese citizens, to ask for and collect fa
piao so that they can earn tax breaks at the end of the year. One of
the biggest tax breaks you can receive is on the rent you pay. A fa
piao can help you avoid paying Chinese taxes on residential lease. Your
landlord has a responsibility to give you fa piao. This can mean
considerably savings. Have your DSP or relocation company get involved
in requesting, obtaining and storing the fa piao for your residence.
The fa piao for your residence should be a required document and should
be stored along side the signed lease agreement.
While at times trying to obtain a fa piao may make you feel like
swearing, but just remember that this foreign detail serves a worthy
purpose. Instead of getting frustrated, get creative -- and revel in
the fact that you can speak a little Mandarin and actually know what a
fa piao is!
Posted on 12/15/2008 in Global Mobility | Comments (0)
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