What Is a Liquidation Sale?
Land value-added tax liquidation means that after meeting the conditions for land value-added tax liquidation, the taxpayer calculates the amount of land value-added tax payable by the real estate development project in accordance with tax laws, regulations and relevant policies on land value-added tax, and clears the land payable by the property project VAT taxes.
Land value added tax settlement
- Land value-added tax liquidation refers to the taxpayer's
- The taxpayer shall truthfully declare the amount of land value-added tax to be paid to ensure the authenticity, accuracy and completeness of the liquidation declaration.
- Tax authorities should provide high-quality tax services to taxpayers and strengthen publicity and guidance on land value-added tax policies. The competent tax authority shall timely review the taxpayer's liquidation declaration income, the amount of deducted items, the value added, the value added rate, and the calculation of taxes, and levy land value added tax in accordance with the law.
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- If the taxpayer meets one of the following conditions, the land value added tax shall be liquidated.
- (One)
- For projects that meet the liquidation conditions and should be subject to land value-added tax liquidation, the taxpayer should go through the liquidation formalities with the competent tax authority within 90 days from the date of meeting the conditions. For the items that meet the second liquidation conditions, the tax authority may require the taxpayer to perform the land value-added tax liquidation, and the competent tax authority shall determine whether to conduct liquidation. For the items that are determined to require liquidation, the competent tax authority shall issue a liquidation notice. The taxpayer shall Complete the liquidation formalities within 90 days from the date of receipt of the liquidation notice.
- If the taxpayer who should perform liquidation of land value-added tax or the taxpayer who has been determined by the competent tax authority to require liquidation refuses to liquidate or does not provide liquidation information within the prescribed period, the competent tax authority may
- The settlement of land value-added tax shall be subject to the approval of the relevant state departments.
- Liquidation information that taxpayers should provide when liquidating land value added tax
- (I) Land value-added tax liquidation form and its attachments (see the attachment for sample reference forms, and localities can formulate according to local actual conditions).
- (two)
- Beijing version of the "Fifteen Articles"
- (5) Differentiated land value-added tax
- Land value-added tax refers to the units and individuals who transfer state-owned land use rights, buildings on the ground and their attachments and obtain income, and pay to the state on the basis of taxation based on the income derived from the transfer, including currency income, in-kind income and other income. A tax that does not include the act of transferring real estate for free by inheritance or gift. Taxpayers are units and individuals that transfer the right to use state-owned land and the property rights of buildings and other attachments on the ground and obtain income. The taxable object refers to the value-added obtained from the paid transfer of state-owned land use rights and the property rights of buildings and other attachments on the ground. The value-added amount of land price refers to the balance of the income obtained from the transfer of real estate minus the prescribed real estate development costs and expenses. The land value-added tax is subject to a four-level super-rate progressive tax rate. The land value-added tax rate is the calculated share of land value-added tax. The land value-added tax rate table is a guide to relevant forms formulated for various situations. In addition, the land value-added tax pre-levy rate has not been calculated correctly. In order to ensure the smooth and uniform flow of taxes into the state treasury, the pre-collection approach adopted is usually levied on a certain percentage of sales revenue.
Land value-added tax clearing collection method
- (1) The added value does not exceed 50% of the deducted amount, and the tax rate is 30%;
- (2) The tax rate is 40% for the value-added amount exceeding 50% of the deducted item amount and not exceeding 100% of the deducted item amount; the quick calculation deduction factor is 5%;
- (3) The tax rate is 50% for the value added that exceeds 100% of the amount of the deducted items and does not exceed 200% of the amount of the deducted items; the quick calculation deduction coefficient is 15%;
- (4) If the value added exceeds 200% of the deducted amount, the tax rate is 60%; the quick calculation deduction factor is 35%;
- (5) Land sales value-added tax shall be exempted if the value-added amount of real-estate enterprises constructing ordinary residences for sale does not exceed 20% of the deduction amount. Article 11 of Caifa Zi [1995] No. 6 "Implementation Rules of the Interim Regulations on Land Value-added Tax of the People's Republic of China". Its calculation formula is:
- Taxable amount = value-added amount × applicable tax rate-deducted item amount × quick calculation deduction coefficient collection method.
Land VAT settlement tax rate
- The land value-added tax is based on the income obtained from the transfer of real estate, the value-added amount after deducting the amount of the statutory deductions as the basis for tax calculation, and is levied at a progressive tax rate of four-level super rate. [1]
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- Note: Land value-added tax is exempted if the value-added amount of real-estate companies constructing ordinary residences for sale does not exceed 20% of the deduction amount.
- Article 11 of Caifazi [1995] No. 6 "Implementation Rules of the Provisional Regulations on Land Value-added Tax of the People's Republic of China" [2]
- Calculation formula
- Taxable amount = added value × applicable tax rate-deducted item amount × quick calculation deduction coefficient.
- State Council Order [1993] No. 138
- Article 1 These Regulations are formulated in order to regulate the order of land and real estate market transactions, reasonably adjust the land value-added income, and safeguard national rights and interests.
- Article 2 Units and individuals that transfer the right to use state-owned land, buildings on the ground and their attachments (hereinafter referred to as real estate) and obtain income, are taxpayers of land value-added tax (hereinafter referred to as taxpayers), and shall comply with these regulations Pay land value added tax.
- Article 3 Land value-added tax is calculated and levied in accordance with the added value obtained by the taxpayer's transfer of real estate and the tax rate specified in Article 7 of these regulations.
- Article 4 The balance of the income obtained by the taxpayer from the transfer of real estate after deducting the amount of the project as stipulated in Article 6 of these regulations shall be the added value.
- Article 5 The taxpayer's income from the transfer of real estate includes currency income, in-kind income and other income.
- Article 6 Deductions for the calculation of value added:
- (1) the amount paid for obtaining the land use right;
- (2) the cost and expenses of land development;
- (3) the costs and expenses of newly-built houses and supporting facilities, or the assessed prices of old houses and buildings;
- (4) taxes related to the transfer of real estate;
- (5) Other deductions stipulated by the Ministry of Finance.
- Article 7 The land value-added tax is subject to a four-level super-rate progressive tax rate:
- The added value does not exceed 50% of the deducted amount, and the tax rate is 30%.
- If the value added exceeds 50% of the deducted amount and does not exceed 100% of the deducted amount, the tax rate is 40%.
- If the value added exceeds 100% of the deducted amount and does not exceed 200% of the deducted amount, the tax rate is 50%.
- If the value added exceeds 200% of the deducted amount, the tax rate is 60%.
- Article 8 In any of the following circumstances, land value-added tax shall be exempted:
- (1) The taxpayer builds and sells ordinary standard dwellings, and the added value does not exceed 20% of the deducted project amount;
- (2) Real estate requisitioned and recovered in accordance with law due to national construction needs.
- Article 9 If a taxpayer has any of the following circumstances, it shall be levied at the real estate evaluation price:
- (1) Concealing or misrepresenting the transaction price of real estate;
- (2) The amount of the deduction items provided is not true;
- (3) The transaction price of the transferred real estate is lower than the real estate evaluation price without valid reasons.
- Article 10 The taxpayer shall, within seven days from the date of signing the contract for the transfer of real estate, apply for tax declaration to the competent tax authority in the place where the real estate is located, and pay the land value-added tax within the period approved by the tax authority.
- Article 11 Land value added tax is levied by tax authorities. The land management department and the real estate management department shall provide relevant information to the tax authorities and assist the tax authorities in collecting land value-added tax in accordance with the law.
- Article 12 If the taxpayer fails to pay the land value-added tax in accordance with these regulations, the land management department and real estate management department shall not go through the relevant procedures for changing ownership.
- Article 13 The collection and management of land value-added tax shall be implemented in accordance with the "Law of the People's Republic of China on Tax Collection and Management" and the relevant provisions of these Regulations.
- Fourteenth these regulations shall be interpreted by the Ministry of Finance, and the implementation details shall be formulated by the Ministry of Finance.
- Article 15 These Regulations shall enter into force on January 1, 1994. Measures for the collection of land value-added fees in various regions that are inconsistent with these Regulations shall be suspended at the same time.