Can the utilities charged by the property company be used as the tax basis for business tax?

Notice of State Taxation Administration of The People's Republic of China on Business Tax on Collection Fees of Property Management Enterprises (Guo Shui Fa [1998] No.217)

Property management companies collect water, electricity, gas (coal), maintenance funds and rent on behalf of relevant departments, which belongs to the "agency" business in the business tax "service industry" tax item. Therefore, the water, electricity, gas (coal), maintenance fund and rent collected by the property management company on behalf of the relevant departments are not subject to business tax, but the fee income obtained from such agency business should be subject to business tax.

Reply of State Taxation Administration of The People's Republic of China on Determining the Tax Basis of Agency Business Tax (No.908 [2007] of the State Administration of Taxation)

When a taxpayer engages in agency business, the taxable income shall be the balance of all the price and other expenses charged by him from the client after deducting the deductible part stipulated in the current tax policy.

Taxpayers engaged in agency business should use the following vouchers as deduction vouchers for the difference in business tax collection: if the turnover deduction item occurs in China, the payment voucher for the deduction item must be an invoice or other legal and valid vouchers; If the payment is made overseas, the voucher for deducting the project payment must be a foreign exchange payment voucher, a receipt from an overseas company or a notarized certificate.

Notice of the Ministry of Finance of State Taxation Administration of The People's Republic of China on Some Policy Issues of Business Tax (Caishui [2003] 16)

Third, about turnover.

(19) The turnover of a unit engaged in property management is the balance of all income related to property management minus the price of water, electricity and gas paid by the owner and the price of water, electricity and gas paid by the lessee.

Notice of Sichuan Provincial State Taxation Bureau on Further Clarifying the Issues Concerning the Management of Ordinary Invoices (No.[2009] of Sichuan State Taxation Bureau12)

Ten, water, electricity and gas invoices

(1) If a water company, an electric power company or a gas company directly collects water, electricity and gas fees from users, or entrusts other units to collect water, electricity and gas fees on their behalf, they shall issue invoices to users in accordance with the relevant provisions of the Measures for the Administration of Invoices, and shall not issue other receipts or invoices in disguise.

(II) If a water supply company, an electric power company or a gas company entrusts a third party (excluding banks) such as neighborhood committees, communities, residential quarters and hydropower supermarkets to collect water, electricity and gas charges, the entrusted unit shall directly issue a title invoice provided by the water supply company, electric power company or gas company to consumers, and shall not use other receipts or vouchers.

(3) When water companies, electric power companies and gas companies sign a contract for entrusted collection of fees with the entrusting unit, they should specifically stipulate the rights, obligations and responsibilities related to the collection, storage, use and settlement of invoices used by the entrusting unit, and the entrusting unit should report to the competent tax authorities for the record. In the past, both parties could sign a memorandum on the issuance of agency charge invoices, and the entrusting unit should report it to the competent tax authorities for the record.

(4) The competent tax authorities shall notify the water supply companies, power companies and gas companies that entrust a third party to collect fees, and provide the title invoices of their own units to the third party. The entrusted unit shall not continue to issue self-made receipts or other vouchers to consumers when collecting fees.

According to the above provisions, water, electricity, gas and other fees charged by property management companies can be taxed according to the difference between invoices or other legal and valid documents when collecting business tax. A complete invoice should be issued to the merchant for all prices and out-of-price expenses.