Laws of the People's Republic of China

Notice of the Ministry of Finance and the State Administration of Taxation on Adjusting the Related Policies for Real Estate Business Taxes

Cai Shui [2006] No.75

The public finance departments (bureaus) and local taxation bureaus of all provinces, autonomous regions, municipalities directly under the Central Government and the cities specifically designated in the state plan and the Public Finance Bureau of Xinjiang Production and Construction Corps.:

For the purpose of carrying out and going into effect the Notice of the General Office of the State Council on Forwarding the Opinions of the Ministry of Construction and Other Departments on Adjusting the Housing Supply Structure as well as Stabilizing Housing Prices (Guo Ban Fa [2006] No. 37) ), refraining speculation and demand of investment housing purchases, and further strengthening the management of business tax collection on individuals' house transfer, the related issues on business taxes are hereby notified as follows:

As of June 1, 2006, if any individual sells a house that has been purchased for less than 5 years, the business tax thereof shall be imposed in full amount. If any individual sells an ordinary residential house that has been purchased for more than 5 years (including five years), the business tax thereof shall be offset. If any individual sells a non-ordinary residential house that has been purchased for more than 5 years (including five years), the business tax thereof shall be imposed in accordance with the balance upon deduction of the purchase price from the sales incomes.

For the aforesaid policies, the standards for ordinary or non-ordinary residential houses, the specific procedures for tax exemption, the time of house purchase, the invoices as drawn, the deduction credence for balance-based tax collection, the house procurement by non-purchase means, and the related provisions on tax collection administration shall be carried out in accordance with the related provisions of the Notice of the General Office of the State Council concerning Transmitting Suggestions of the Ministry of Construction and Other Departments concerning Doing Well in Stabilizing Housing Prices (Guo Ban Fa [2005] No. 26), the Notice of the State Administration of Taxation, the Ministry of Finance and the Ministry of Construction concerning Strengthening the management of Real Estate Tax Collection (Guo Shui Fa [2005] No. 89) and the Notice of the State Administration of Taxation concerning Several Specific Issues in carrying out the Policies for Real Estate Tax Collection (Guo Shui Fa [2005] No. 172).

The local finance and taxation departments at all levels shall carry out the tax policies in a strict way, strengthen the tax collection and management and shall report the issues arising in the process of implementation to the Ministry of Finance and the State Administration of Taxation in time.

Ministry of Finance

State Administration of Taxation

June 16, 2006