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Land value-added tax risks may explode as housing market supply and demand undergo major changes
July 29, 2024, 1:31 p.m.
1370Views
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The conditions for exemption of the appreciation tax on compensation payments for enterprises' land being revoked are surprisingly high
July 15, 2024, 11:28 a.m.
1639Views
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Real estate developers' decision to waive the preferential tax policy for ordinary residential properties during land appreciation tax settlement has sparked controversy. What is the rationale behind
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.June 25, 2024, 1:20 p.m.
1063Views
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Does the auction payment paid by the buyer in judicial auction to the court already include the transfer taxes payable by the transferor?
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.May 24, 2024, 4:58 p.m.
1308Views
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Three Major Controversies Facing the Land Value-Added Tax Settlement of Civil Air Defense Parking Spaces
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.May 9, 2024, 2:05 p.m.
1343Views
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Inflated costs and expenses to pay back taxes and penalties of 36 million: a case to see the four major tax risks of real estate and development enterprises
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.Dec. 13, 2023, 5:49 p.m.
1575Views
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Does the tax authority have the right to recover the tax if an individual acquired and transferred the land use right more than ten years ago?
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.Nov. 30, 2023, 1:21 p.m.
1650Views
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Suspended real estate enterprises to obtain land compensation was approved income tax and fines, not required to make up the land increase tax
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.Nov. 30, 2023, 12:11 p.m.
1569Views
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Whether land value-added tax should be levied on idle land resumed by the government from two cases
A real estate development enterprise obtains the land use right to develop and construct a real estate project, which may not be able to start or may be stalled for a number of reasons, and then the government will take back the land. According to the Urban Real Estate Management Law, urban land resumption can be categorized into compensated and uncompensated. As to whether enterprises need to pay land value-added tax when the government resumes the land with compensation and the land compensation is higher than the cost of land acquisition and development, the results of the current cases are different. This article will analyze whether land value-added tax should be levied under different circumstances when land is resumed by the government.Nov. 26, 2023, 9:56 p.m.
1978Views
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Can interest expenses be truthfully deducted when a real estate company fails to obtain an invoice for a loan from a financial institution?
The initial cost of real estate project development is high, and a large amount of capital investment is required for pre-development. Many enterprises' own funds are difficult to meet the demand for engineering construction, and due to the strict approval of loans by financial institutions, in order to ensure that the project is carried out normally, the enterprises are forced to broaden the source of funds through other financing channels. However, according to the rules of the current tax law, when handling the land value-added tax settlement, the interest expenses incurred are subject to different deduction methods depending on the circumstances. Taxpayers should effectively grasp the scope and conditions of interest expense deduction to ensure maximum enjoyment of deduction.Nov. 21, 2023, 1:42 p.m.
2555Views
