Over the past couple of weeks I have been quite frustrated at the amount of time and red tape “BS” it takes to get some things done. For example, last week I went to the Household Registration office to update our records to advise them that we had moved residence from Zao Chiao to Taipei. I took all forms of ID including passport, ARC card, my wife’s ID card and Drivers License plus a copy of the lease document for where we are living. Not good enough. They wanted to sight some other document that I think may have been something like a property tax notice or similar. So we had to call the landlord and get him down to the office too with that document. He was able to leave after about 20 minutes. In total I was there for around 2.5 hours to get the address on an ID card updated.
The next day I went to China Trust Bank to organise an online banking facility as I am getting very tired of paying for everything in cash. It took almost 2 hours to get the paperwork filled out and satisfy the bank. At China Trust Bank no one speaks English but that is not the reason for things taking so long, I had Claire with me and she is fluent in Chinese and English.
After a few days the bank sent a guy to our office with a secure card reader and 3 smart cards. He provided some training and I got the online banking from China Trust working but it is only available in Chinese.
In my experience government departments and banks here are incredibly anal on paperwork and compliance. It appears that no one wants to make a decision in case it is wrong and they look bad or it affects their career path. So they go and talk with someone else and someone else again.
This compliance mentality is also very prevalent in the area of business expenses. It is not enough to just have the receipt for a business expense. At the time of purchase you have to advise them of your unique business ID and get it printed on the receipt or you cannot claim the expense. If I incur an expense in my name on behalf of the business with rare exception I cannot claim that as a business expense because the business number is not on it.
If I pay for some service overseas such as getting someone to design a product label for me or write some software, or any other such item that is not physically shipped through Taiwan customs, if I want to claim that as a company expense I have to pay 20% tax on the amount first.
Today was quite a day. I learned something. I received an email from my accountant who is processing the mountain of expense receipts and bank statements that I gave them recently. The email said that I owe the tax department some money, associated with my office lease. About NT$3,000 (AU$ 107/US$94) per month that we have leased the office. I spoke with Claire to try and understand what was going on.
We have a lease document (all in Chinese), and the lease document says that the monthly rental is NT$26,000, plus some expenses such as security, electricity, etc. (NT$26,000 is about AU$897, or US$815, it is not a lot of money but it is a small office in a very good neighbourhood.)
Anyway after drilling down and drilling down I find out that there is a clause in the lease that says if you want to claim this office lease expenditure as a business expense then you are required to pay the associated tax. What this really means is that the landlord is not going to declare to the tax office the income that I pay them for leasing the office. If I claim that expenditure as a business expense, which effectively alerts the tax office to the income the landlord received, then I have to pay the tax that the landlord would have had to pay the tax office if he declared the income. I cannot believe that they can be so blatant about tax avoidance.
There have been many times where I have bought a small item and then when I ask for a receipt with my business number on it they charge me a higher price.
As I understand it now – there are two prices available in a surprisingly large number of businesses the legal price and the illegal price. I cannot believe given how anal government departments and banks are, how open and widespread this practice of non-declaration of income and tax avoidance is.
On a more positive note given the amount of pain and frustration when going to the bank, I decided to look for another bank, hopefully one where some English was spoken. I had looked at the HSBC bank website and found that they had a branch near my office. The website was a promising start as it is available in both Chinese and English. So I decided to go there and find out more.
It was the best banking experience I have ever had anywhere. It was more like entering a 5 star hotel. The service was excellent from start to finish. The security guard opened the door and welcomed me in English. Then a lady in a smart uniform came up to me and asked in English how they could help me today. I said I was interested in opening an account. She took me to a well appointed lounge area and asked me to take a seat why she located someone to help me. She asked if I would like a tea, coffee or cool drink. Normally I would not have a coffee because you can get some horrible stuff served up, but my first impression was very good and I decided to see how far the excellence went.
Before the coffee arrived a guy arrived introduced himself and took us into a private office. He asked a few questions to determine my banking needs and then said that he was in the personal banking area and that he would get someone from commercial banking to assist me.
While he was gone the coffee arrived and it was good. I was thinking I might have to find reasons to visit the bank when I was in the mood for a good coffee.
Another gentleman entered the office and introduced himself. He was the assistant VP of Commercial Banking. He sat down and explained the bank’s services, and some of the features and benefits of their services. No question of mine was left unanswered and there were no areas where I was left wondering if I really understood correctly what they were saying.
I said I wanted to open an account straight away. The paperwork took almost no time to complete and all forms bar one were in English. He required one document that I did not have with me. He offered to ring my accountant and get it directly.
Late this afternoon I received an email from him. He updated me on the timing of my account progress and supplied me the contact details of my account manager and told me that this guy is the best guy they have.
What a world of difference between China Trust Bank and HSBC. As I already stated, the service that I received today from HSBC Bank at Neihu was the best I have experienced anywhere and I will highly recommend them to any foreigner working in Taipei.
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