IIT, Social Insurance & Private Pension – Seminar in Tianjin

By ECOVIS Beijing

On the 27th of May 2015, Ms. Manuela Reintgen of ECOVIS Beijing and Mr. Klaus-Peter von der Eltz of Expatriate Care Consult held a seminar on individual income tax (IIT), social insurance and private pension, in cooperation with the German Chamber of Commerce in Tianjin.

With regard to long-term employment in China, many issues concerning the terms of that employment, a suitable contract design and the ensuing insurance questions arise. Furthermore, the relations between contributions by employers and employees, the options for optimizing the individual income tax structure were discussed. Specifically, how a number of benefits can be used to minimze the taxable income while providing the same value. Ms. Reintgen also emphasized the importance and urgency of properly handling these benefits and the individual income tax filings in general as China is lately paying close attention to foreigners’ tax filings. New to the audience was the new social insurance cap released by the PRC. Manuela Reintgen and Mr. Klaus-Peter von der Eltz focused their presentations on these points and gave practical advice.

Manuela Reintgen explained for instance how the IIT burden could be reduced by implementing an annual bonus in the salary structure and showed how much RMB could be saved with this measure alone. When Klaus-Peter von der Eltz spoke about the benefits and drawbacks of the Chinese social insurance. He pointed out that it remains important to have a private provision in order to avoid any financial damages and be fully covered in case of health issues or accidents. People from Germany who don’t speak Chinese should be aware of possible language barriers and that they might also have to deal with long queues and less privacy since the Chinese medical insurance only covers treatments administered in government-approved hospitals.

All in all the seminar covered the following aspects:

• Background to social insurance in Germany and China
• Calculating and optimizing the individual income tax
• Employment in China and effects on social insurance
• Insurance coverage for Germans in China

 Manuela Reintgen (manuela.reintgen@ecovis.com) has lived and worked in Shanghai and Beijing since 2009. As Manager of the Business Development department at ECOVIS Beijing, contract design, social insurance, individual income tax and further HR related topics form an inherent part of her day-to-day work.

Mr. Klaus-Peter von der Eltz (k.eltz@expatriate-consult.de) worked as the representative of an insurance group in Shanghai for five years. He is an insurance expert with his focus on mainland China and the business director of Expatriate Care Consult.