On July 24, 2023, the Political Bureau of the Central Committee of the Communist Party of China held a meeting to analyze and study the current economic situation, pointing out that at present, the supply and demand relationship in China's real estate market has undergone significant changes. Against the background of the impeded operation of the real estate market and the continued downturn in real estate development investment, real estate development enterprises are facing different degrees of capital pressure. At present, housing prices around the world continued to decline, property transactions plummeted, real estate development enterprises sales revenue is far lower than expected at the beginning of the project development, the project profit shrinks significantly. In the past, many real estate development enterprises acquired land use rights in the form of transferring the equity of the project company through open share field transactions, in which the transferor did not pay the land value-added tax, and the subsequent project company needed to bear a huge amount of land value-added tax due to the extremely low land price paid for the land use rights in real estate liquidation. When the real estate price was high, the project company was still able to bear the cost of real estate development including the tax burden. Now that the real estate market is in the doldrums and the profitability of the project has been greatly reduced, the real estate development company may face the risk of not being able to pay the huge amount of land value-added tax. At the same time, according to the previous tax collection and management practice, the transferor of the land use right in the field of explicit shares is also facing the risk of being penetrated to collect land value-added tax or even characterized as tax evasion. In addition, the legal risks faced by the transferring parties are also more complicated due to the different operations of enterprises in the process of land acquisition, establishment of project companies and equity transfer. Based on this, this paper analyzes the tax risks of the equity transferor and transferee in the field transaction of explicit shares based on the current situation of real estate market for readers' reference.

Editor's Note: In recent years, with the acceleration of urban renewal, infrastructure construction has witnessed constant innovation in various regions. However, in the planning of infrastructure projects, the occupation of corporate land is often involved, leading to frequent situations of land requisition and acquisition. After receiving compensation from the government, companies usually enjoy preferential policies in value-added tax (VAT), but there are often disputes between enterprises and tax authorities in terms of the application of tax exemption. This article takes the example of approval document disputes over tax exemption to delve into the relevant procedures and applicable conditions for tax exemption during land requisition process, and provide practical suggestions for relevant enterprises.

Since the implementation of the "Interim Regulations on Land Appreciation Tax," the preferential tax policy for ordinary residential properties has always been in effect: taxpayers who construct and sell ordinary standard residential properties, with the appreciation amount not exceeding 20% of the deductible project amount, are exempt from land appreciation tax. For real estate development enterprises, controlling the selling price and appreciation rate of ordinary residential properties can enjoy tax exemption incentives, provided that different types of real estate are accounted for separately as required. In practice, some real estate enterprises have found that abandoning the preferential tax policy for ordinary residential properties in the same project is more conducive to reducing tax liability, but subsequent disputes have arisen with tax authorities during the review of land appreciation tax settlement. This article will discuss this issue and provide suggestions for the readers.

Recently, there have been frequent occurrences of companies falling into operational difficulties and being unable to repay debts, leading creditors to apply to the court for forced auction of the debtor's assets. During the execution of auctions by the people's courts, disputes over the tax and fee obligations of the transferor have arisen continuously due to the clause in the bidding announcement formulated by the executing court stating that "all taxes and fees related to the transfer of real estate shall be borne by the buyer." This article takes a case of tax recovery for the forced auction of real estate by the court as an example, analyzes the tax obligations and collection difficulties in judicial auctions based on legal principles and policy regulations, and finally provides suggestions to buyers to help them reduce tax risks and minimize similar disputes.

Editor's Note: In real estate projects, civil air defense parking spaces are a common type of project. Due to the special nature of the property rights of civil air defense, it has triggered many disputes over land value-added tax. For example, whether civil air defense parking spaces should be taxed with land value-added tax, whether they belong to the settlement scope, whether the consideration obtained should be included in the income, whether the construction cost can be deducted as a deduction item, and how to collect the cost, etc. This article will discuss several focal points among many controversial issues and provide suggestions on how to avoid the risk of land value-added tax settlement for civil air defense parking spaces.

Recently, a local tax bureau in Fujian Province issued a notice to characterize the tax evasion and impose a fine of more than RMB 20 million on a local real estate enterprise for inflating operating costs and sales expenses and underpaying enterprise income tax and land value-added tax. This case is typical and reflects four types of tax risks common to real estate enterprises, i.e., business authenticity risk, cost accounting risk, cost deduction risk and account management risk. This paper intends to combine the illegal facts and characteristics of the enterprises involved in this case to reveal the relevant tax risks of housing and development enterprises.

Recently, a local tax bureau issued two Notices of Tax Matters, ordering the individual who acquired the land use right and transferred it to the outside world to declare and pay the taxes and late fees involved in the two transactions. Based on the background of this case, this article will analyze the differences between civil law and tax law, the tax basis of the transactions involved, and whether the recovery period is applicable.

Recently, an inspection bureau of Hainan Provincial Taxation Bureau announced a Notice of Administrative Penalties, which characterized the tax evasion of a real estate enterprise that had been revoked for 12 years and refused to declare enterprise income tax and urban land use tax after being notified to do so by the tax authorities, and proposed to impose a fine of 50% of the amount of the enterprise income tax to be paid within the period of the recovery of the penalty. Based on the factual information disclosed in the notification letter, this article will summarize and analyze the facts of this case.