State Taxation Administration of The People's Republic of China

Announcement on Several Provisions on the Collection and Management of Land Value-added Tax after the Reform of the Camp

State Taxation Administration of The People's Republic of China Announcement No.71 of 2116

In order to further improve the collection and management of land value-added tax after the Reform of the Camp, According to the Provisional Regulations of the People's Republic of China on Land Value-added Tax and its detailed rules for implementation, and the Notice of the Ministry of Finance and State Taxation Administration of The People's Republic of China on the Tax Basis of Individual Income Tax for Deed Tax, Property Tax and Land Value-added Tax (Cai Shui [2116] No.43), some issues concerning the collection and management of land value-added tax are hereby clarified as follows:

1. Confirmation of taxable income of land value-added tax after the reform

After the reform, taxpayers Taxpayers who apply the general tax method of value-added tax, the taxable income of land value-added tax on the transfer of real estate does not include the output tax of value-added tax; Taxpayers who apply the simple tax calculation method, the taxable income of land value-added tax on the transfer of real estate does not include the taxable amount of value-added tax.

in order to facilitate taxpayers and simplify the calculation of pre-tax on land value-added tax, real estate development enterprises sell their own real estate projects in advance. According to the following methods, the basis of land value-added tax pre-collection can be calculated:

the basis of land value-added tax pre-collection = advance payment-VAT tax should be paid in advance

Second, about the confirmation of land value-added tax taxable income that is regarded as selling real estate after the reform of the camp

Taxpayers use the developed products for employee welfare, incentives, foreign investment, distribution to shareholders or investors, repayment of debts, exchange for non-monetary assets of other units and individuals, etc. When the ownership transfer occurs, it shall be regarded as the sale of real estate, and its income shall be implemented in accordance with the provisions of Article 3 of the Notice of State Taxation Administration of The People's Republic of China on Issues Concerning the Management of Land Value-added Tax Liquidation of Real Estate Development Enterprises (Guo Shui Fa [2116] No.187). Taxpayers resettle relocated households, and the confirmation of taxable income and deduction items of houses for relocation and resettlement shall be carried out in accordance with Article 6 of the Notice of State Taxation Administration of The People's Republic of China on Issues Related to Land Value-added Tax Liquidation (Guo Shui Han [2111] No.221).

III. Tax deduction related to the transfer of real estate

(1) After the reform of the camp, the "tax related to the transfer of real estate" in the deduction items for calculating the value-added tax of land does not include the value-added tax.

(2) After the camp reform, the urban maintenance and construction tax (hereinafter referred to as "urban construction tax") and education surcharge actually paid by real estate development enterprises can be deducted according to the facts. Where it cannot be accurately calculated according to the liquidation items, the urban construction tax and education fee actually paid when the value-added tax is paid in advance according to the liquidation items will be deducted.

the additional deduction of urban construction tax and education fee for other real estate transfer acts shall be implemented according to the above provisions.

IV. Calculation of land value-added tax liquidation before and after the camp reform

When real estate development enterprises conduct land value-added tax liquidation of real estate development projects after the camp reform, The relevant amount is determined according to the following methods:

(1) taxable income of land value-added tax = income from the transfer of real estate before the camp reform+income excluding value-added tax from the transfer of real estate after the camp reform

(2) taxes related to the transfer of real estate = business tax, urban construction tax and education surcharge actually paid before the camp reform+urban construction tax and education surcharge allowed to be deducted after the camp reform

5. On the confirmation of invoices for construction and installation expenses after the reform of the camp

After the reform of the camp, taxpayers of land value-added tax should indicate the name of the county (city, district) where the construction service takes place and the name of the project in the remarks column of the invoice in accordance with the Announcement of State Taxation Administration of The People's Republic of China on Tax Collection and Management Matters Related to the Pilot Reform of Business Tax to Value-added Tax (State Taxation Administration of The People's Republic of China Announcement No.23, 2116), otherwise it will not be included in the land value-added tax deduction project amount.

VI. On the calculation of deduction in the transfer of old houses

After the camp reform, taxpayers transfer old houses and buildings. If they can't get the estimated price, but they can provide purchase invoices, the amount of deduction items stipulated in Items 1 and 3 of Article 6 of the Provisional Regulations on Land Value-added Tax of the People's Republic of China shall be calculated according to the following methods:

(1) If the purchase vouchers provided are business tax invoices obtained before the camp reform,

(2) If the proof of purchasing a house is an ordinary VAT invoice obtained after the reform of the camp, it shall be calculated by adding 5% to the total amount of price and tax contained in the invoice every year from the year of purchase to the year of transfer.

(3) If the purchase invoice provided is a special value-added tax invoice obtained after the reform of the camp, it shall be calculated according to the sum of the value-added tax that is not included in the invoice plus the value-added tax that cannot be deducted, and 5% shall be added every year from the year of purchase to the year of transfer.

this announcement shall come into force as of the date of promulgation.

it is hereby announced.

State Taxation Administration of The People's Republic of China

October 11, 2116