Taxes (税)

Not the most stimulating title, but the story behind it is an interesting one.

When a landlord rents an apartment in Beijing, China's 户口 ("hukou") regulations require that the landlord and the new tenant register with the local police station. As part of the registration process, the landlord must file a copy of the lease so that the local authorities can determine the tax owed by the landlords on the rental income. We learned yesterday, however, that most landlords will file an "amended" copy of the lease with the cops.

What this means is that landlords change the part of the lease where the monthly rent is specified using white-out and a pen. Aware of this problem, the local authorities have set a floor on the minimum rents to be charged in certain areas so that landlords can't claim a rent that would be the equivalent of $20 per month. Still, Chinese landlords persist in cheating on their taxes.

Evidently this is done throughout China and Latin America. Americans are used to the threat of prison time, so most would never even dream of cheating the tax man in this manner.

The upshot is that some tenants use the threat of reporting their landlords as leverage in negotiations. I know one person who got new stuff for their kitchen using the threat of administrative fines and imprisonment. (See the Chinese Criminal Code art. 201) And I know of another couple that may use their landlord's amendments in order to get out of their lease for the summer. Good times!