Foreigner social tax scheme negotiated
Source: Agencies |
March 8, 2012, Thursday
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Print Edition
Print Edition
CHINA is in talks with other governments over a new law requiring working foreigners to pay social security taxes, Deputy Minister of Human Resources and Social Security Hu Xiaoyi said yesterday, but won't back down despite a backlash from firms nervous about increasing costs.
Hu said progress on implementing the tax was going smoothly, even as uncertainty continues about what benefits foreign workers might receive.
"Our ministry and different parts of the country are proactively and reliably pushing forward with the detailed work for this project," Hu said on the sidelines of China's annual meeting of parliament.
At least a dozen countries have held talks with China about signing bilateral social security agreements, he added, which should mean employees who pay contributions in their home countries do not have to do so again in China.
Array of benefits
China announced last July that foreign workers would have to contribute to its social security system, effectively a salary tax with individuals paying 10 percent and employers about 30 percent on the first 12,603 yuan (US$2,000) of monthly pay.
The payments allow foreigners with work permits in China to receive pensions, unemployment, medical insurance and maternity benefits - the same as those for Chinese citizens.
However, the mechanism for tapping benefits is unclear, especially as foreigners who lose work visas must leave the country.
Hu said the ministry has issued more than 200,000 work permits to foreigners, but the number of foreigners who have signed up to the social security system in China was still being counted.
The social insurance scheme took effect on October 15 last year.
Hu said progress on implementing the tax was going smoothly, even as uncertainty continues about what benefits foreign workers might receive.
"Our ministry and different parts of the country are proactively and reliably pushing forward with the detailed work for this project," Hu said on the sidelines of China's annual meeting of parliament.
At least a dozen countries have held talks with China about signing bilateral social security agreements, he added, which should mean employees who pay contributions in their home countries do not have to do so again in China.
Array of benefits
China announced last July that foreign workers would have to contribute to its social security system, effectively a salary tax with individuals paying 10 percent and employers about 30 percent on the first 12,603 yuan (US$2,000) of monthly pay.
The payments allow foreigners with work permits in China to receive pensions, unemployment, medical insurance and maternity benefits - the same as those for Chinese citizens.
However, the mechanism for tapping benefits is unclear, especially as foreigners who lose work visas must leave the country.
Hu said the ministry has issued more than 200,000 work permits to foreigners, but the number of foreigners who have signed up to the social security system in China was still being counted.
The social insurance scheme took effect on October 15 last year.
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