Let’s look at the deductions that are allowable one-by-one:
Meal allowance
Foreign employees are allowed to deduct a certain amount that they spend on meals each month from their taxable income. Most of the fapiaos submitted should be issued by restaurants; although for some portion of the allowance fapiaos issued by supermarkets may also be accepted. Please note that the fapiao should state that the product purchased was “meals” or “food.”
Housing allowance
The amount spent on rental of an apartment may also be deducted. However please be aware that in China a private landlord will often be reluctant to issue an official fapiao because in order to obtain one, he/she must pay approximately 17 percent of the rental amount received to the Tax Bureau. If a fapiao is requested, the landlord will likely charge a large premium on top of the originally negotiated rental amount. Foreign employees that require a fapiao should negotiate this with the landlord before signing the rental contract. Fapiao issuance should be clearly mentioned in the agreement. Foreign employees living in a serviced residence will not have this problem – the residence will be managed by a company that can issue a fapiao.
Laundry allowance
This is fairly self-explanatory – an allowance for the dry cleaning of clothes etc.
Children’s education allowance
Some of the cost of a foreign employee’s education expense for the studying of Chinese
