Infobank

Understanding Fapiao, it is elusive and exclusively China's

Updated: 11 May 2010
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Read more on Fapiao   tax receipt   invoice   Xiamen Local Tax Bureau  
 
Fapiao发票 [fā piào] – [Commerce] is confusing to many who are not familiar with its use, purpose and function. It is exclusively used in China and it is NOT just simply a tax receipt.
 
Fapiao is a bill; a receipt; an invoice, paper to support warranty and contract, further more, it is a state lottery. It is in fact all of the above. To many foreigners, they do NOT value this piece of paper, thinking it is simply for tax purpose, and they do not have to declare their income in China, so fapiao is useless to them.
 
The fapiao system is used by Chinese tax authorities to calculate and collect business taxes as well as to deter tax evasion. A fapiao is provided by businesses to consumers for the amount of services or goods rendered much like a receipt.
 
Some might say that the fapiao is just a receipt, but it’s actually a bit more than that. Not only can you potentially win some money from the “scratch and sniff” fapiao, but sometimes you will be required to give them to your employer. 
 
For those with expense accounts, fapiao is how you are reimbursed for your travel, food or other purchases.
 
From your favorite local restaurant to your barber down the street to your cab driver, consumers are urged to get fapiao whenever possible. This might seem obvious enough, but there are different kinds of receipts and being able to distinguish proper fapiao can mean the difference between getting reimbursed for your expenses and having to pay your minibar bill out of your own pocket. Keep in mind that there is a big difference between a handwritten receipt (generally not official unless it has the proper stamps) and the printed kind in the picture below (official).
 
A fapiao with scratching "prize area" in the upper right corner 
 
However, there are some big differences between a receipt and a fapiao:
- Fapiao are issued in denominations, like currency
- Fapiao 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 fapiao. - Some will provide both, and a few will not give either (avoid those places)!
- Fapiao sometimes include scratch off panels concealing authentication passwords that can be redeemed for prizes in a lottery format
  
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 fapiao. Expatriates are encouraged, just like Chinese citizens, to ask for and collect fapiao so that they can earn tax breaks at the end of the year.
 
You can always get one but they're not always offered, so whenever you're in doubt, ask. It's usually a piece of paper somewhat larger than your typical cash register receipt and stamped with an official red stamp. In the case of taxi, train tickets and so forth, the fapiao is also the shou ju--the only thing that elevates it to the level of fapiao is the official red stamp. In the case of restaurants, it will be resemble a large ticket with a pre-printed amount of money.
 
You shouldn’t be surprised either if some businesses will go out of their way to avoid giving you an official fapiao. When they issue official receipts they have to report and pay taxes on the sale and many companies loathe to do so, and will go so far as to tell you they are out and you’ll need to come back tomorrow. If you do show up the next day, don’t count on getting a receipt then either. It is worth noting for those of us not on expense accounts, that you can trade the fapiao for a slight discount (usually around the 6% the company will pay in taxes for issuing one).
 
There are also fapiao for transportation. Taxis, buses all offer fapiao. Many times your employer will ask for these; collecting these is crucial for those with expense accounts who want their taxi ride with a client reimbursed. However, these receipts are also helpful, especially when you’re in a taxi. Since most cab drivers are in a rush to get you out and get the next rider in, by asking the driver for fapiao you can buy yourself a few extra moments to make sure you are not leaving anything behind. You will also get the taxi’s number in case you did leave anything behind.
 
The restaurant fapiao doubles as a kind of lottery ticket, too. There is a special box on the fapiao which you scratch off to potentially win some money. Usually they just read 谢谢您, or “thank you,” but sometimes you can win anywhere from a few to a few hundred RMB, which the restaurant should pay back to you then and there.
 
The "prize area". Usually they just read 谢谢您, or "thank you" but sometimes
you can win anywhere from a few to a few hundred RMB
 
Another important fapiao issue to settle is with your landlord. It’s important that your landlord pays the appropriate taxes on your home or flat and that you receive the fapiao. While you might not need the fapiao immediately after you move in, make sure that you have this important piece of paper will help alleviate problems in the future. As you will read below, many employers need your apartment-related fapiao when filing your taxes. 
 
Fapiaos come in both individual and business flavors. Officially, there is not much difference between the two except that the business ones have your company’s name written or printed on them by the business issuing it. This takes longer and shouldn’t make much of a difference legally, but be sure to check with your accountant or accounting department to see which they prefer.
 
Fapiao may still seem like an enigma, and collecting and figuring out the use of fapiao may seem like a chore. And while your server might roll their eyes and groan when you say “fapiao,” it’s important to ask for it and get it. You may find that it’ll be useful for you in the long run. 
 
SOURCE: echinacities.com & relojournal.com
 
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