The deed tax of government property is transferred free of charge.

The construction of public facilities in real estate enterprise projects is handed over to local governments free of charge, involving the treatment of value-added tax, land value-added tax and enterprise income tax. To sum up, the public facilities built in real estate enterprise projects are handed over to local governments for tax treatment free of charge: First, they are not regarded as sales to pay VAT, and can be deducted from the input VAT; Second, land value-added tax is not levied as sales, but its cost can be deducted; Third, enterprise income tax is not levied as sales, and construction costs can be deducted before enterprise income tax.

(1) Treatment of VAT: VAT is not paid as sales, but the input VAT can be deducted. According to Item (2) of Article 14 of Annex/KLOC-0 of Caishui [20 1 6] No.36, if the real estate with business tax is transferred to other units or individuals free of charge, it shall be regarded as sales and VAT shall be levied, unless it is used for public welfare or for the public.

People's Republic of China (PRC) Public Welfare Donation Law (Order No.2001). President People's Republic of China (PRC) 19) Article 2 This Law is applicable to natural persons, legal persons or other organizations who voluntarily donate property to legally established public welfare social organizations and public welfare non-profit institutions and engage in public welfare undertakings.

Article 3 The term "public welfare undertakings" as mentioned in this Law refers to the following non-profit-making projects: (1) activities of social groups and individuals such as disaster relief, poverty relief and disability assistance; (2) Education, science, culture, health and sports; (3) Environmental protection and public facilities construction; (4) Other public interests and welfare undertakings that promote social development and progress. Article 10 Public welfare social organizations and public welfare non-profit institutions may accept donations in accordance with this Law. The public welfare social organizations mentioned in this Law refer to foundations, charitable organizations and other social organizations established according to law with the purpose of developing public welfare undertakings. The public welfare and non-profit institutions mentioned in this Law refer to non-profit educational institutions, scientific research institutions, medical and health institutions, social public cultural institutions, social public sports institutions and social welfare institutions established in accordance with the law. According to the above-mentioned laws and policies, public facilities built in real estate enterprise projects are handed over to local governments free of charge for public welfare or for the public, which are not regarded as sales and do not pay value-added tax. Real estate enterprises hand over public facilities to government departments free of charge, and if they are not used for public welfare or for the public, they are regarded as sales and subject to value-added tax. In other words, the construction of public facilities in real estate enterprise projects is handed over to local governments free of charge, which is not considered as sales. The collection of value-added tax must meet the following three conditions:

First, the public supporting facilities that the real estate enterprise handed over to the local government free of charge and were not sold separately;

According to Article 5 of People's Republic of China (PRC) State Taxation Administration of The People's Republic of China AnnouncementNo. 18 and No.20 16, the land price allowed to be deducted in the current period is calculated according to the following formula for real estate development enterprises with general taxpayer qualification to sell their real estate projects (except those with simple tax calculation):

Land price allowed to be deducted in the current period = (construction area of real estate projects for sale in the current period ÷ construction area of real estate projects for sale) × paid land price.

The "practical construction area of real estate project" in this formula refers to the total practical construction area of real estate projects, excluding the construction area of supporting public facilities that are not separately priced and settled when selling real estate projects.

Second, the public facilities built in real estate enterprise projects are handed over to local governments for public welfare or public service free of charge;

Third, the public facilities built by real estate enterprises are outside the saleable area. Public facilities built outside the red line are not regarded as business tax if they are handed over to the local government for public welfare without compensation.