Laws of the People's Republic of China

State Administration of Taxation

Notice of the State Administration of Taxation on Strengthening the Work of Analyzing the Real Estate Tax Revenue

Guo Shui Fa [2005] No. 151

Departments (bureaus) of finance, bureaus of state taxes and bureaus of local taxes in all provinces, autonomous regions, municipalities directly under the Central Government, and cities specially designated in the state plan:

The real estate industry occupies an important place in the national economy, and the strengthening of the macroscopic control in the real estate industry constitutes an important component of the macroscopic control of the national economy. All the authorities concerned are required by the State Council to conduct a close tracking and a timely study of the situations in the real estate industry. Notice is hereby given on relevant requirements of work for the purposes of carrying out the instructions of the State Council, of strengthening the work of analyzing the tax revenue in the real estate industry, and of giving full play to the adjust and control role of tax in the real estate industry.

I.

A report of the situations of all regions in carrying out the Notice of the General Office of the State Council on the Transmission of the Proposals Submitted by the Ministry of Construction, the Ministry of Finance, the State Administration of Taxation and other Seven Ministries and Commissions concerning Doing Well the Work of Stabilizing the Housing Price (Guo Ban Fa [2005] No. 26) shall quarterly be submitted to the State Administration of Taxation, and descriptions of the situations in the 40 key cities shall separately be presented in the submitted documents.

II.

Analyses shall be conducted on the related situations of various tax categories in the submitted documents of all regions, and the requirements for various tax categories in the process of submission are as follows:

(1)

. The Policy of Business Tax and its Collection and Administration

1.

The floor space completed, the sales floor space, the sales turnover, the taxed sales floor space, and the taxed sales turnover of the newly-built commercial housings and the actually collected business tax.

2.

The sold floor space of individuals' housings purchased for less than 2 years and the business tax collected herein. The sold floor space of individuals' common and non-common housings purchased for more than 2 years and the business tax collected herein.

3.

The lease floor space of housings, the rentals and the business tax collected herein.

(2)

. The Policy of Income Tax and its Collection and Administration

1.

The situations in carrying out the Notice of the Ministry of Finance, the State Administration of Taxation and the Ministry of Construction on Relevant Issues concerning the Collection of Individual Income Tax on the Individual's Income Earned by Selling Housings (Cai Shui Zi [1999] No. 278)

2.

How is the income from housing lease taxed, and what is the collection rate in case that the individual income tax is collected with the integrated collection rate? How is the allocation of tax revenue conducted among various tax categories?

3.

What problems exist in the current policy of exemption of individual income tax in housing sales and leases, and what are the proposals and suggestions for improvement?

4.

How to strengthen the collection and administration of individual income tax in housing sales and leases.

5.

The statistics of the individual income tax revenue collected from housing sales and leases as of the year of 2003 (per year)

(3)

. The Policy of the City and Town Land Use Tax, the Land Value-added Tax and the Real Estate Tax and their Collection and Administration

1.

The payable city and town land tax after the real estate development enterprises obtain the land-use right, and its concrete data items are the household number of the real estate development enterprises, the floor space and the payable (exemptible) tax amount.

2.

The payable land value-added tax of the income earned by real estate development enterprise in the alienation of land-use right and development projects and the sales of newly-built commercial housings, and its concrete data items are the household number of the real estate development enterprises, the alienated (sold) floor space, the income and the prepaid (or clearance) tax amount.

3.

The land value-added tax paid in the alienation of housings in stock, and its concrete data items are the transaction quantity, the transaction amount, the tax exemption amount, the payable tax amount and the actually paid tax amount.

4.

The situation in the collection of real estate tax, and its concrete data items shall distinguish between self-use housings and lease housings; and with regard to the lease housings, the individually leased shall be distinguished from the non-individually leased, and the lease of dwelling housings shall be distinguished from the lease of non-dwelling housings.

The aforesaid data items shall be accompanied with their counterparts of the corresponding period in the previous year so as to conduct analyses of the situations of increase and decrease. Those failing to submit the data of the corresponding period in the previous year in accordance with the standards provided for in this Notice shall resort to the existing standards.

Those having difficulties in submitting data required in Article 2 and Article 4 may, in the year of 2005, provide the statistical data in existence; while as of the year of 2006, they shall submit in accordance with the standards required. Those in all verity failing to submit the data of the year of 2006 in accordance with the standards provided for in this Notice, shall indicate the circumstances to the State Administration of Taxation, and shall actively provide conditions for submitting data in accordance with the standards provided for as soon as possible.

(4)

. The Policy of Contract Tax and its Collection and Administration

1.

The monthly total revenue collected from the contract tax.

2.

The revenue collected from the housing contract tax and land contract tax against the total revenue.

3.

The contract tax revenue collected from the sales of newly-built commercial housings against the housing contract tax revenue, and the number of sets and floor spaces of the sold housings in increment; the contract tax revenue collected from the alienation of housings in stock and the number of sets and floor spaces of the transacted housings in stock.

4.

The contract tax revenue collected from the sales of common housings against the one collected from the newly-built commercial housings and the number of sets and floor spaces of the transacted common housings; the contract tax revenue collected from the sales of non-common housings and the number of sets and floor spaces of the transacted non-common housings.

5.

The contract tax revenue collected from the sales of common housings against the one collected from the housings in stock and the number of sets and floor spaces of the transacted common housings; the contract tax revenue collected from the sales of non-common housings and the number of sets and floor spaces of the transacted non-common housings.

III.

The local authorities of taxation and finance at all levels shall strictly carry out the policies of real estate tax, and pay close attention to the changes in the local real estate markets, so as to conduct tracking and assessing summarization of the influences of the changes in the local real estate markets and the adjustment of the taxation policies upon the local real estate markets and financial revenue.

Annex: Name list of the 40 Key Cities (omitted)

The State Administration of Taxation

September 22, 2005