What are the special provisions for the settlement of real estate enterprises?

What are the special provisions for the settlement of real estate enterprises?

Enterprise real estate development business includes land development, construction and sales of residential and commercial buildings, attachments, supporting facilities and other development products. Due to the particularity of real estate development enterprises, the tax law also has special provisions in the final settlement of enterprise income tax. The author chooses several difficult problems to analyze as follows.

Pre-sale income can be used as the calculation base of advertising fee and business entertainment fee.

Articles 43 and 44 of the Regulations for the Implementation of the Enterprise Income Tax Law stipulate that business entertainment expenses incurred by an enterprise related to production and business activities shall be deducted according to 60% of the amount incurred, but the maximum amount shall not exceed 5‰ of the sales (business) income of that year. Unless otherwise stipulated by the competent department of finance and taxation of the State Council, the eligible advertising expenses and business promotion expenses incurred by the enterprise do not exceed 15% of the sales (business) income of the current year, and are allowed to be deducted; The excess shall be allowed to be carried forward and deducted in future tax years. It can be seen that sales (business) income is the base for calculating advertising expenses, business promotion expenses and business entertainment expenses.

Article 6 of the Measures for the Treatment of Enterprise Income Tax in Real Estate Development Business (Guo Shui Fa [2009] No.31) stipulates that the income obtained by an enterprise through the formal signing of a real estate sales contract or a real estate pre-sale contract shall be recognized as the realization of sales income. From this point of view, for real estate development and management enterprises, the income obtained by formally signing the real estate pre-sale contract should be recognized as the realization of sales income, and the pre-sale income can be used as the base for calculating advertising fees, business promotion fees and business entertainment expenses.

The tax paid in advance can be deducted before tax.

Article 25 of the Detailed Rules for the Implementation of the Provisional Regulations on Business Tax stipulates that if a taxpayer transfers the land use right or sells real estate in advance, its tax obligation will occur on the day when it receives the advance payment. Where a taxpayer provides services in the construction industry or leasing industry in the form of advance payment, its tax obligation occurs on the day when the advance payment is received. Therefore, for real estate development enterprises, when they receive the pre-sale or rental income or pay the construction service fee, the business tax obligation time has already occurred, and they should pay the business tax, urban maintenance and construction tax, education surcharge and other related taxes and fees according to regulations.

Article 16 of the Detailed Rules for the Implementation of the Provisional Regulations on Land Value-added Tax stipulates that if the income obtained by taxpayers from the transfer of real estate before the completion and settlement of the project cannot be calculated due to cost determination or other reasons, the land value-added tax may be levied first, and the liquidation shall be carried out after the completion of the project. The specific measures shall be formulated by the local tax bureaus of provinces, autonomous regions and municipalities directly under the Central Government according to local conditions. Therefore, for real estate development enterprises, land value-added tax is generally pre-sold and pre-paid, and will be liquidated after reaching the liquidation conditions.

It can be seen that for real estate development and operation enterprises, business tax, urban maintenance and construction tax, education surcharge and land value-added tax should be paid according to regulations in the pre-sale of real estate. According to the current financial accounting regulations, these taxes are generally calculated through business taxes and surcharges. Article 12 of Guo Shui Fa [2009] No.31stipulates that the expenses incurred by the enterprise in the current period, the taxable cost of selling and developing products, business tax and surcharges, and land value-added tax are allowed to be deducted in the current period. Therefore, the tax paid by real estate enterprises in the pre-sale link can be deducted before income tax.

Part of the accrued expenses can be treated as taxable costs.

Article 6 of the Announcement of People's Republic of China (PRC) and State Taxation Administration of The People's Republic of China on Several Issues Concerning Enterprise Income Tax (People's Republic of China (PRC) State Taxation Administration of The People's Republic of China Announcement No.34, 20 1 1) stipulates that if the relevant costs and expenses actually incurred by the enterprise in the current year cannot be obtained in time for various reasons, the enterprise may temporarily account for the quarterly income tax in advance; However, at the time of final settlement, valid vouchers of costs and expenses should be supplemented. According to this regulation, if an enterprise fails to obtain a valid cost certificate before the end of the settlement date, it shall not be deducted before income tax.

At the same time, Article 32 of Guo Shui Fa [2009] No.31stipulates that, in addition to the following accrued (payable) expenses, the actual cost shall be the taxable cost: First, if the outsourcing project has not been finally settled and the full invoice has not been obtained, the insufficient invoice amount may be accrued on the premise of sufficient supporting information, but the maximum amount shall not exceed 10% of the total contract amount. Second, if the public supporting facilities have not been built or completed, the construction cost can be reasonably accrued according to the budgeted cost. Such public facilities must conform to the irrevocable conditions in the housing sales contract, agreement or advertisement and model, or must be built in accordance with laws and regulations. Third, fees for construction approval and property improvement that should be submitted to the government but have not yet been submitted can be accrued according to regulations. Property improvement fees refer to property management funds, public building maintenance funds or other special funds that should be borne by enterprises according to regulations.

From this point of view, State Taxation Administration of The People's Republic of China Announcement No.34 (20 1 1) and Guo Shui Fa [2009] No.31have different provisions on the time to provide valid vouchers. In this regard, we generally only recognize State Taxation Administration of The People's Republic of China Announcement No.34 (20 1 1), and by default, Document No.31(Guo Shui Fa [2009]) will automatically become invalid, because State Taxation Administration of The People's Republic of China Announcement No.34 (20 1 1) is the latest regulation. You can refer to the provisions of Article 83 of the Legislative Law, that is, laws, administrative regulations, local regulations, autonomous regulations and separate regulations and rules formulated by the same organ. Where the special provisions are inconsistent with the general provisions, the special provisions shall apply; If the new regulations are inconsistent with the old regulations, the new regulations shall prevail. Announcement No.34 of People's Republic of China (PRC) State Taxation Administration of The People's Republic of China (20 1 1) is a general provision, while document No.31of the State Administration of Taxation [2009] is a special provision, which is still valid. As for Article 83 of the Legislative Law, "If the new provisions are inconsistent with the old provisions, the new provisions shall apply", which is aimed at the special law or the general law at the same level, and is not inconsistent with the implementation of the three withholding (payable) expenses in the document No.31of the State Administration of Taxation [2009].