Difference between land value-added tax and real estate enterprise income tax

According to the Notice of State Taxation Administration of The People's Republic of China City, People's Republic of China (PRC) on Printing and Distributing the Measures for Handling Enterprise Income Tax of Real Estate Development Business (Guo Shui Fa [2009] No.365438 +0) and the Notice of State Taxation Administration of The People's Republic of China City, People's Republic of China (PRC) on Printing and Distributing the Regulations on Land Value-added Tax Liquidation (Guo Shui Fa [2009] No.965438 +0), there are the following similarities and differences between enterprise income tax and land value-added tax deduction items.

1) The similarities between them.

Enterprise income tax and land value-added tax are based on income (appreciation). The enterprise income tax of real estate enterprises shall be taxed every year according to the sales income of developed products (or sales income before completion) MINUS the taxable income after deducting the project. Land value-added tax is levied according to the income MINUS the value-added after deducting items.

2) the differences between them.

(1) Land price charged by different projects. Land value-added tax lists the amount paid for land use rights separately, while enterprise income tax is included in the "land expropriation fee and demolition compensation fee" of the taxable cost of development products.

⑵ Deduction of real estate development expenses in different forms is allowed. Real estate development enterprises mainly include costs, expenses, taxes, losses and other expenses when calculating the deduction items of taxable income of their enterprise income tax. The land value-added tax deduction items include the price paid for land use rights, real estate development costs, real estate development costs and taxes related to the transfer of real estate, plus 20% deduction.

The land value-added tax deduction project is different from the enterprise income tax in real estate development expenses (management expenses, sales expenses and financial expenses). Not according to the actual amount, but according to a certain proportion (10%). If the deduction is added, it is not based on the actual cost, but 20% of the total land cost and development cost.

Among the taxable costs of enterprise income tax, the withholding expenses can be calculated according to the provisions of the tax law. Article 32 of Guo Shui Fa [2009] No.31stipulates that, in addition to the following accrued (paid) expenses, the actual cost shall be the taxable cost, namely: (1) If the outsourced project has not been finally settled and all invoices have 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. 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. (three) the construction costs and property improvement costs that should be reported to the government for approval but have not been submitted for approval can be withheld and remitted according to the regulations. Property improvement costs refer to property management funds, public building maintenance funds or other special funds that should be borne by enterprises according to regulations.

(3) Different methods of land price allocation. Among the taxable costs of enterprise income tax, Article 30 of Guo Shui Fa [2009] No.31stipulates that the following costs of an enterprise shall be allocated according to the following methods. Land costs are generally allocated according to the area method. If it is really necessary to combine other methods for distribution, it should be agreed with the tax authorities. Land development and real estate development are linked at the same time, which is to acquire land at one time and develop real estate by stages. With the approval of the tax authorities, the cost of land development can be shared according to the overall budget cost of land, and then adjusted after the overall development of land is completed.

As for the land value-added tax deduction project, according to the Provisional Regulations on Land Value-added Tax and its detailed rules for implementation, the land price paid by taxpayers to obtain the land use right, the related expenses paid in accordance with the unified regulations of the state, the compensation for land acquisition and demolition, etc., if the land is developed by stages and in batches, the land deduction amount of each project will be determined according to the area method; If there are both ordinary standard rooms and non-ordinary standard rooms in the same project, the deduction items shall be shared according to the construction area method, and the value-added part shall be accounted for separately.

(4) Loan interest deduction is different. In the final calculation of enterprise income tax, the calculation of loan interest is divided into capitalization and expense. That is, the borrowing costs incurred by enterprises in borrowing funds for the construction and development of products that meet the tax requirements can be collected and distributed in accordance with the provisions of the accounting standards for enterprises, and the borrowing costs belonging to the nature of financial expenses can be directly deducted before tax.

In the settlement of land value-added tax, the interest expense can only be deducted separately, and the enterprise should exclude the interest expense included in the cost from the cost and deduct the interest expense included in the financial expense. If the interest expenses meet certain conditions, you can choose to deduct them according to the facts; Do not meet the conditions, you can also choose to calculate the deduction. For details, please refer to the following chapter: Allocation and deduction of interest expenses.

5] Deduction items have different requirements for legal credentials. In the final settlement of enterprise income tax, Article 34 of Guo Shui Fa [2009] No.31stipulates that the actual expenses incurred by an enterprise in the final settlement of taxable costs are not included in taxable costs, but should be included in taxable costs when legal documents are actually obtained.

In the liquidation of land value-added tax, Article 21 of Guo Shui Fa [2009] No.91stipulates that in the liquidation of land value-added tax, the actual expenses shall be obtained but the legal documents shall not be deducted.

[6] Project cost accounting methods are different. In the final settlement of enterprise income tax, Article 29 of Guo Shui Fa [2009] No.31stipulates that the products developed and built by enterprises shall be measured and accounted according to the manufacturing cost method. Among them, the cost of developing products should be included in the cost, which belongs to the direct cost and indirect cost that can distinguish the cost object and is directly included in the cost object. * * * The same cost and the unit cost that cannot distinguish the burden objects shall be allocated to each cost object according to the principle of benefit and proportion.

In the liquidation of land value-added tax, Article 17 of Guo Shui Fa [2009] No.9/KLOC-0 stipulates that real estate development projects shall be liquidated on the basis of projects approved and filed by relevant state departments; Projects developed by stages shall be liquidated by stages; For different types of real estate, the value-added amount and value-added rate should be calculated separately, and the land value-added tax should be paid.

Land value-added tax refers to a tax paid to the state by units and individuals who transfer the right to use state-owned land and the above-ground buildings and their attachments, based on the income obtained from the transfer, including monetary income, physical income and other income after deducting the legal amount of the project, excluding the behavior of transferring real estate without compensation by inheritance and gift. Taxpayers are units and individuals who transfer the right to use state-owned land and the property rights of buildings and other attachments on the ground and earn income. The object of taxation refers to the value-added amount obtained by the paid transfer of the right to use state-owned land and the property rights of buildings and other attachments on the ground.

The value-added of land price refers to the balance after deducting the specified real estate development costs and expenses from the real estate transfer income. The land value-added tax is subject to a four-level progressive tax rate. Land value-added tax is actually an anti-real estate windfall tax, which refers to the income obtained by real estate enterprises and other units and individuals in the process of paid transfer of state-owned land use rights and housing sales, and after deducting development costs and other expenses, it is a tax paid to the state.

At present, China's land value-added tax has a four-level progressive tax rate. If the land appreciation rate is high, it will be levied more; if the land appreciation rate is low, it will be levied less and there will be no appreciation. For example, if the value-added amount is more than 20% and less than 50%, the tax rate is 30%, and if the value-added amount exceeds 200%, the tax rate is 60%. According to experts' calculation, as long as the gross profit margin of real estate projects reaches above 34.63%, land value-added tax needs to be paid.

(1) The tax basis is the value-added amount of the transferred real estate.

The value-added amount of land value-added tax is the balance of the total sales income of taxable objects after deducting related costs, expenses and taxes, which is different from value-added tax.

(2) The scope of taxation is relatively wide.

All units and individuals who transfer real estate in China and obtain income shall pay land value-added tax in accordance with the provisions of the land value-added tax regulations, except those exempted from tax according to the tax law. That is to say, all units and individuals who have taxable activities, regardless of their economic nature, whether they are domestic and foreign-funded enterprises or Chinese and foreign personnel, and whether they specialize in or run real estate business concurrently, have the obligation to pay VAT.

(3) Implementing a progressive tax rate.

The tax rate of land value-added tax is determined on the basis of the value-added rate of transferred real estate, designed according to the principle of progressiveness, and classified taxation is implemented. High value-added rate, high tax rate and overpayment of taxes; If the value-added rate is low, the tax rate will be low and the tax will be less.

(4) Implementation of set.

In the process of real estate transfer, land value-added tax is levied every time, and a tax is levied according to the value-added amount obtained every time.