However, in practice, due to various reasons, there are a lot of operations that violate the provisions of Article 39 of the Urban Real Estate Management Law. In this regard, this paper intends to sort out and analyze the application of Article 39 of the Urban Real Estate Management Law in practice and the latest local policies, and make a legal analysis of the currently widely used trading methods.
First, meet the definition of 25% investment
1. Provisions of laws and regulations
Article 2 of the Measures for the Disposal of Idle Land stipulates: "Idle land mentioned in these Measures refers to the state-owned construction land that the owner of the right to use the state-owned construction land has not started development for one year beyond the paid use contract or the allocation decision period. State-owned construction land that has started development but the area of development and construction land accounts for less than one-third of the total area of development and construction land that should be started, or that has invested less than 25% of the total investment and has been suspended for one year can also be identified as idle land. "
Article 9 of the Interim Measures for the Administration of Transfer, Lease and Mortgage of the Right to Use State-owned Construction Land in Fangshan District of Beijing stipulates: "If one of the following conditions is met, it can be considered as reaching more than 25% of the total development investment: (1) The land area that has started development and construction accounts for more than one third of the total land area that should start development and construction; (2) The land use right holder provides legal proof that the investment amount issued by the audit department has reached more than 25% of the total development investment. "
2. The total investment does not include land transfer fees, deed tax and other expenses.
The Opinions of the Ministry of Land and Resources on Further Improving the Disposal of Idle Land stipulates that "total investment" refers to the total amount of funds directly invested by land users in land development, excluding the fees for obtaining land use rights and related taxes and fees paid to the state. "Investment" refers to the total amount of funds invested by land users in land development and construction. "
Article 30 of the Measures for Disposal of Idle Land stipulates: "Investment amount and total investment: excluding the transfer price, transfer price and related taxes paid to the state for obtaining the right to use state-owned construction land."
Therefore, the determination of the total investment should not include the land transfer fee paid by the development enterprise and the corresponding taxes and fees such as deed tax and stamp duty, but only the investment in construction projects implemented on the land after the land is acquired.
3. Composition of total investment
According to the terminology of China Price Association [2065438+05] No.86, the total investment of a construction project consists of construction investment, interest during the construction period, fixed assets investment direction adjustment tax and liquidity. Among them, the interest during the construction period includes bank loans, interest on other debt funds and other financing expenses. The construction investment consists of the engineering cost of the construction project, other engineering construction costs and preparation costs. Among them, the project cost includes construction cost, equipment purchase cost and installation cost; Reserve funds include basic reserve funds and price difference reserve funds.
Article 9 of the Interim Measures for the Administration of Transfer, Lease and Mortgage of the Right to Use State-owned Construction Land in Fangshan District of Beijing stipulates: "The total amount of development investment shall be determined according to the total amount of development investment approved by the construction project approval authority."
When determining the total investment, it should generally be based on the data determined when the project is established.
Second, the effectiveness of the transfer contract
In judicial practice, the court tends to think that the transfer of land does not reach more than 25% of the investment, which is not a mandatory legal provision to determine the effectiveness of the land use right transfer contract, but a flaw in the subject matter of the contract and does not affect the effectiveness of the land use right transfer contract.
For example, in the announcement of the Supreme Court, "(2004) Minyizhongzi No.46", the Supreme Court held that the stipulation in Article 38 of the Urban Real Estate Management Law that the investment should reach 25% of the total development investment when transferring land is the restrictive condition for the subject matter of the land use right transfer contract when the property right changes, and the transferred land does not reach more than 25% of the investment, which is a defect of the subject matter of the contract and does not directly affect the effectiveness of the land use right transfer contract. The foregoing provisions are not mandatory provisions to determine the effectiveness of the contract for the assignment of land use rights. Therefore, if the parties claim that the contract is invalid on the grounds that the investment and development conditions have not reached 25%, the court will not support it.
Although the contract is invalid, the court usually thinks that if the transfer registration cannot be handled, both parties can terminate the contract accordingly and divide the liability for breach of contract according to the liability agreed in the contract.
However, we should remind everyone that although the courts and arbitration institutions believe that "25% of the total unfinished investment" is effective in transferring real estate land. However, in practice, the land transfer requires the cooperation of the land department to complete the transfer registration, but according to the provisions of Articles 38 and 39 of the Urban Real Estate Management Law, the land department will not support the transfer of the right to use. Therefore, in practice, although the validity of the agreement was judged in the litigation stage, it is difficult for the land owner not to cooperate with the registration of ownership change in the implementation process.
Third, how to treat the attitude of the land department in the pilot area in practice.
20 17 the Ministry of land and resources issued the notice on improving the pilot scheme of the secondary market for the transfer, lease and mortgage of construction land use rights, listing 28 pilot areas for the pilot of the secondary market for state-owned land. The pilot areas include, Fangshan District of Beijing, wuqing district of Tianjin, Shijiazhuang City of Hebei Province, Taiyuan City of Shanxi Province, Erenhot City of Inner Mongolia Autonomous Region, Fushun City of Liaoning Province, Changchun City of Jilin Province, Mudanjiang City of Heilongjiang Province, Nanjing City of Jiangsu Province, Ningbo City of Zhejiang Province, Suzhou City of Anhui Province, Xiamen City of Fujian Province, Nanchang City of Jiangxi Province, Linyi City of Shandong Province, Xuchang City of Henan Province, Wuhan City of Hubei Province, Changsha City of Hunan Province, Dongguan City of Guangdong Province, Nine Districts of Chongqing City, Luzhou City, Kunming City, Yunnan Province, Xi City, Shaanxi Province, Tianshui City, Gansu Province, Xining City, Qinghai Province, Shizuishan City, Ningxia Hui Autonomous Region and Korla City, Xinjiang Uygur Autonomous Region.
In this regard, various localities have issued corresponding pilot regulations, standardized the pilot work of the secondary land market, and made a breakthrough system design for 25% of the land. In the pilot area, the buyer and the seller can sign a non-invalid and enforceable land transfer contract under the condition of satisfying 25% of the land, but only register the ownership transfer, which can only be completed after the transferee completes 25% of the land development.
For example, Article 14 of the Interim Provisions on the Administration of Transfer of State-owned Construction Land in the Secondary Market in Kunming stipulates: "If the acquired land use right does not start construction according to the contract for transfer of state-owned land use right, but it is not idle land, or the total investment in development is less than 25% of the total investment to be developed, it can also be transferred to the secondary market, but the land use conditions cannot be changed ... If the transferee of land use right starts construction and the investment intensity reaches 25%, it will be held by the local government (management committee).
Article 14 of the Implementation Measures for the Interim Administration of the Transfer, Lease and Mortgage of the Right to Use State-owned Construction Land in Shijiazhuang stipulates: "If the land is sold for the first time and the total investment is not over 25%, both parties to the transaction are allowed to go through the advance notice registration according to law after signing the Contract for the Transfer of the Right to Use State-owned Construction Land, and then go through the real estate transfer registration formalities after the development investment meets the transfer conditions. The right holder of advance notice registration may apply to the development and reform, planning, environmental protection, administrative examination and approval departments for the start of construction projects with other necessary materials such as the advance notice registration certificate of real estate. "
The Measures for the Administration of Secondary Market Transactions of State-owned Construction Land Use Rights in Nanning (Trial) stipulates: "When the land (including net land) with an investment less than 25% of the total investment is transferred, the transferee may go through the formalities for examination and approval of the project under-construction with the original land certificate, original transfer contract and transaction voucher, and go through the formalities for real estate transfer registration after the project starts to reach 25%."
The introduction of the new regulations has solved the problem of transferring the right to use construction land with a total investment of less than 25%, effectively satisfied the interests of both parties to the transaction, protected the legitimate rights and interests of both parties to the transaction, promoted the smooth circulation of land elements, revitalized the existing land and improved the allocation efficiency of land resources.
Fourth, the investment price.
In practice, there are different opinions on whether investing in project companies by land pricing is bound by the 25% investment limit stipulated in the Urban Real Estate Management Law.
Regarding whether the transfer includes fixed-price investment, the land use management department has answered the questions of social investors in the form of ministerial information. In this reply, the land use management department believes that Article 29 of the Regulations on the Implementation of the Land Management Law of the People's Republic of China stipulates that the paid use of state-owned land includes the transfer of state-owned land use rights, the lease of state-owned land, and the contribution or shareholding of state-owned land use rights. Therefore, "fixed price contribution" belongs to the exclusive concept of paid use in the primary market, and does not include "transfer". The situation described in the letter does not belong to "fixed price investment" and should be recognized as real estate transfer.
However, Article 3 of the Regulations on the Administration of Urban Real Estate Transfer stipulates: "The term" real estate transfer "as mentioned in these Provisions refers to the act of real estate owners transferring their real estate to others through sale, gift or other legal means. The other legal ways mentioned in the preceding paragraph mainly include the following acts: (1) The ownership of real estate has changed due to the establishment of an enterprise legal person with others as the price. "
At the same time, Article 7 of the Supreme People's Court's Interpretation on Applicable Legal Issues in the Trial of State-owned Land Use Right Contract Disputes stipulates that "the land use right transfer contract mentioned in this interpretation refers to the agreement that the land use right holder, as the transferor, transfers the land use right to the transferee and the transferee pays the price".
It can be seen that in the legal provisions and the interpretation of authoritative departments, there is no uniform provision on whether land belongs to land transfer.
On this basis, we consulted the land departments of Beijing, Shanghai, Hangzhou, Chengdu and other non-pilot areas, and these administrative departments all responded verbally. Both land transfer and land pricing involve the change of land use right, which should be regarded as land transfer, so it is limited to 25% of the total investment. At the same time, in our actual operation, we also encountered a case in which a client tried to inject land into the project company in the form of a writer's contribution, but it could not be implemented because it could not be coordinated with the land department.
To sum up, we believe that although the current legal framework does not explicitly require that fixed-price land investment must meet the rigid limit of more than 25% of the investment, in practice, most land departments are indeed tight in scale and generally do not agree to fixed-price investment. Therefore, we suggest that it is easy to discuss such cases one-on-one, that is, the approval opinions of different land departments shall prevail.
Five, about the analysis of equity transfer:
As mentioned above, meeting the investment and development intensity of 25% is a hard requirement in practice, so the counterparty adopts the way of "saving the country by curve" and completes the transfer of land use rights by transferring the company's equity.
1. In terms of tax treatment, State Taxation Administration of The People's Republic of China has repeatedly sent letters requesting that land value-added tax should be paid for land transfer by way of equity.
State Taxation Administration of The People's Republic of China, People's Republic of China (PRC) issued "Reply on Land Value-added Tax on Real Estate Transfer in the Name of Equity Transfer" and "Reply on Relevant Policy Issues of Land Value-added Tax in State Taxation Administration of The People's Republic of China, People's Republic of China (PRC)", and the reply was [20 1 1]. 4 15 "Reply of People's Republic of China (PRC) and State Taxation Administration of The People's Republic of China on the Collection of Land Value-added Tax on the Transfer of Land Use Rights of TEDA Hang Seng in Tianjin" is clear in the form of a single reply: one-time transfer of 100% of the company's equity, and these assets in the form of equity are mainly land use rights, above-ground buildings and attachments. Through research, it is considered that the transfer of land use right by means of equity transfer is essentially a real estate transaction and should be in accordance with the provisions of the Provisional Regulations on Land Value-added Tax.
2. Various regions have introduced countermeasures.
In order to avoid the rigid requirement that the investment and development intensity must reach 25%, all regions will require land bidders to make corresponding commitments not to transfer equity and keep the equity structure unchanged when bidding for land. For example, Article 32 of the Contract for Assignment of the Right to Use State-owned Construction Land (Operating Land) in Shanghai, China directly stipulates that the equity transfer of the project company needs to be "25% of the total development investment". At the same time, Zhongshan, Guangdong Province clearly stipulated in the Notice on Several Matters Concerning the Transfer of Land Use Rights that the project company's equity needs to promise not to change before the development investment progress reaches 25%.
3. The risk of constituting a criminal offence
In fact, it will be a criminal offence to transfer all the shares to others without paying all the land transfer fees, handling the land use right certificate and making substantial investment and development.
For example, on April 2, 20 19, the Higher People's Court of Anhui Province held in the case of "(20 19) Anhui No.20" that after obtaining the state-owned land use right, Liu Longbo's wholly-owned real estate co., Ltd. successively transferred all its shares to others without paying the land transfer fee, handling the land use right certificate and making substantive investment and development. Liu Longbo made a profit by reselling the land use right in the form of transferring stock rights, which is subjectively profitable and the circumstances are serious. His behavior conforms to the elements of the crime of illegally reselling land use rights. "
4. Summary
To sum up, although there are a large number of successful cases in practice, land use rights have been transferred by equity, but not every subsequent case can be successfully implemented, and improper operation may lead to the risk of being investigated for criminal responsibility.
Therefore, we suggest that when making the decision to transfer the land use right by equity, in order to avoid being held accountable, we suggest that the target company to be transferred should conduct appropriate other business instead of simply owning a piece of land.
Legal measures of intransitive verbs
Combined with the above analysis, in practice, there are still substantial obstacles to the direct transfer of land that has not reached 25% investment intensity in the pilot areas of China and Africa, and both parties cannot directly transfer it. In this regard, we combine several common operation methods in practice to provide you with experience and ideas for transaction processing:
1. The transferor is responsible for the construction mode.
In this mode, the two sides signed a cooperation framework agreement, stipulating that the transferor is responsible for completing the construction of 25% of the target plot. After the completion of land construction, a specific land use right transfer agreement will be signed according to the cooperation framework agreement to complete the transfer of the target land.
In practice, specific operations can include: (1) the transferee provides loans to the transferor, and the transferor completes the construction; (two) the transferor completed 25% of the investment and construction with self-raised funds. At the same time, the transferee participates in the management of the target plot construction, and the transferor handles the corresponding design approval procedures according to the requirements of the transferee.
This method is the most compliant in practice, with relatively little risk to buyers and sellers, but it is usually not feasible. When transferring the target land, the transferor usually encounters some difficulties in capital turnover, so it is often not feasible to complete 25% investment before transferring. Although the loan provided by the transferee is a solution, if the transferor cannot provide strong guarantee measures, the transferee's loan cannot be guaranteed to be paid off.
2. Principal-agent construction mode
The transferee and the transferor signed an entrusted agent construction contract, stipulating that the transferor would entrust the transferee to carry out the agent construction project on the target plot, and the transferee would hire the constructor and designer to handle the land construction licenses such as project planning and construction permit, and the transferee would be responsible for the actual transaction. If the transferor has no funds to pay, the transferee may provide loans to the transferor and pay them to the transferor's account under the supervision of the transferee. Or according to the tax accountant's opinion, an entrusted payment agreement can be signed, and the transferor will directly pay the loan entrusted to the transferee to the construction subject.
After the investment intensity of the target plot reaches 25%, the two parties sign a specific agreement on the transfer of land use rights to complete the transfer of the target plot.
In this mode, before the actual transfer of land use rights, the transferee directly participates in the construction of the target land, and carries out the construction, construction and transaction of the target land. The transferor is only the nominal holder, and the risk is relatively controllable for the buyer. For the seller, there is no need to invest additional funds for land transfer.
In this mode, there are two main risks:
(1) After the transferee has provided a large amount of funds for land construction and completed 25% of the investment, the transferor may revitalize the project as a whole, thus unilaterally dissolving the cooperation between the two parties and completing the development and construction of the target plot by itself. In this case, the transferee will only ask the transferor to bear certain liability for breach of contract and recover the investment cost, but will not be able to continue to enjoy the development right of the target land;
(2) The investment in the target plot will greatly increase its overall value, and the transfer of land use rights will involve the payment of land value-added tax.
3. Company separation mode
The transferor is divided into the original actual subject of the transferor and the subject holding the subject land independently established by the industrial and commercial department. After the division is completed, the transferor directly purchases 0/00% equity of the newly established entity/kloc-which holds the target land alone from the transferee's shareholders, thus completing the transfer of the target land.
If the land transfer is completed by company division, it is necessary to communicate with the industrial and commercial departments in advance whether the company division can be carried out and the specific process of the company division. In practice, many industrial and commercial departments have many restrictive requirements on the handling of company division. Whether the company's division can be handled smoothly must be actively communicated with the industrial and commercial registration department where the company is located in advance.
At the same time, as mentioned above, simply transferring the company's equity also risks being inspected by the land department. It is necessary to communicate and negotiate with the land department in advance to confirm whether the land department agrees to transfer the target land by means of equity transfer.
In practice, the industrial and commercial departments often have to sign an agreement with the separated company, and the separated company will be jointly and severally liable for the debts before the separation. Therefore, for the transferee, the acquisition of the company's equity after the separation will face the risk of bearing the transferor's external liabilities before the separation according to the requirements of these separation agreements.