Can property companies still pay taxes according to the difference under the new business tax law?

Q: Does Article 5 of the new business tax regulations "other circumstances stipulated by the competent departments of finance and taxation of the State Council" include property companies? In addition, what other circumstances are allowed to be deducted when paying business tax?

A: Article 4 of the Provisional Regulations of the People's Republic of China on Business Tax (the State Council Order No.540, 2008) stipulates that taxpayers who provide taxable services, transfer intangible assets or sell real estate shall calculate the taxable amount according to the turnover and the prescribed tax rate. Calculation formula of tax payable: tax payable = turnover × tax rate turnover is calculated in RMB. If a taxpayer settles its turnover in a currency other than RMB, it shall be converted into RMB for calculation.

Article 5 stipulates that the taxpayer's turnover shall be the total price and other expenses collected by the taxpayer for providing taxable services, transferring intangible assets or selling real estate. However, the following circumstances are excluded: (1) If a taxpayer subcontracts the contracted transportation business to other units or individuals, the turnover shall be the balance of the total price and other expenses obtained by it after deducting the transportation expenses paid to other units or individuals; (2) If a taxpayer engages in tourism business, the turnover shall be the balance of the total price and extra-price expenses obtained by him after deducting the accommodation fees, meals, transportation fees, tickets for tourist attractions and travel expenses paid to other package tourism enterprises for tourists; (3) If a taxpayer subcontracts a construction project to other units, the turnover shall be the balance of the total price and other expenses obtained after deducting the subcontracting money paid to other units; (4) For the business of buying and selling foreign exchange, securities, futures and other financial commodities, the turnover shall be the balance of the selling price minus the buying price; (five) other circumstances stipulated by the competent departments of finance and taxation of the State Council.

The Notice of the Ministry of Finance of People's Republic of China (PRC), State Taxation Administration of The People's Republic of China, on Some Policy Issues of Business Tax (Caishui [2003] 16) stipulates: (19) The turnover of units engaged in property management is the balance of all income related to property management minus the prices of water, electricity and gas paid on behalf of owners and the prices of water, electricity and gas paid on behalf of tenants.

Therefore, the turnover of units engaged in property management is the balance of all income related to property management minus the prices of water, electricity and gas paid on behalf of owners and tenants.