Method of liquidation of land value added tax
1. Understanding land value added tax self-liquidation and definition of liquidation requirements
(1) a taxpayer who meets one of the following conditions shall carry out its own liquidation of the land value added tax: a full completion of the real estate development project and its sale; an overall transfer of the unfinished accounts real estate development project; and a direct transfer of land use rights。
(2) the competent tax authorities may require the taxpayer to carry out the liquidation of the land value added tax (vat) if one of the following conditions is met: one of the real estate development projects that has been completed and accepted, with the transferred real estate building area accounting for more than 85 per cent of the total area available for sale, or the remaining svd area, which is not more than 85 per cent, has been leased or used for its own use; two of the remaining svd areas that have not been sold after three years of obtaining a licence to sell (pre-sale); three of the taxpayers who have applied for the cancellation of the tax register without the processing of the land value added tax; and four provinces (autonomous regions, municipalities directly under the central government, planned municipalities) and other cases stipulated by the tax authorities. Land value added tax liquidation methods
In the case of item 3 of the preceding paragraph, the land value added tax (vat) should be liquidated prior to the cancellation of the registration。
2. Proper identification of the liquidation of tax units
In the case of land value added tax liquidation, the real estate development enterprise shall liquidate the land in units of projects approved and filed by the relevant state authorities: for phased development projects, the project shall be liquidated as a unit; value added, value added and land value added tax shall be calculated separately for different types of real estate. For phased development projects or for simultaneous development of multiple projects, income, costs and costs should be reasonably pooled over different periods and projects。
3. Carefully examine the authenticity of sales proceeds
Based on sales invoices, sales contracts (including online registrations by the housing authority), licences for the sale of commodity houses (pre-sale), a list of sub-households for the sale of property and other relevant information, the enterprise shall establish a schedule of sales: verify the differences in data between the area sold and the area available for the project: check the size of the commercial houses covered by the sales contract against the actual measurement of the area by the department concerned and the income adjustments resulting from the replenishment and refunds; review the authenticity of the sale price when assessing it。
4. Careful review of tax deductions
(1) in accordance with the circular of the general state tax administration on issues relating to the administration of land value added tax settlement in real estate development enterprises
State tax (2006) 187
Article 4, paragraph 1, provides that: “the deduction of the amount paid for the acquisition of land use rights, the cost of the development of the real estate, the costs and taxes associated with the transfer of the real estate shall be subject to the provision of lawful and valid documents; and shall not be subject to deduction if no valid legal documents are available”. 1. Compensation for expropriation and demolition of land. It refers to the costs incurred in obtaining access to land for development (or development rights), including land expropriation, cropland occupancy tax, deed tax, labour settlement fee and net expenses of compensation for demolition of land and subterranean attachments, and expenditure on relocation housing. Legally valid documents are: receipts for land fees, bills for administrative establishments, invoices for transfer of intangible assets, tax notes, service invoices, agreements, invoices for construction installation, invoices for non-operational income, etc. 2 pre-construction costs. This refers to hydrogeological surveys, mapping, planning, design, feasibility studies, preparation, and pre-costs of equity in the pre-development phase of the project. Legally valid documents are: service invoices, bills for administrative undertakings, invoices for construction installation, etc. 3 construction and installation works. This refers to construction installation costs incurred during the development of the development project。
For developers, particular attention will be given to land value added tax (lat), which is a tax that directly affects business profits. For individuals, the possible definition of land value added tax is not clear. Perhaps many buyers would ask, "do you have to pay land value added tax to buy your own house?" if there is to be an understanding of land value added tax (vat) liquidation methods, attention will have to be paid to the above。
