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Announcement of Sichuan Local Taxation Bureau on Relevant Issues Concerning the Liquidation Unit of Land Appreciation Tax and Other Relevant Issues

Document No.:

Taxes:Land Appreciation Tax

Date of Promulgation:2014-06-01

IssueDepartment:Local Taxation Bureaus of Localities

Date of Implementatio:2014-06-10

Annex:

In order to further standardize the administration of levy & collection of land appreciation tax of our province, the relevant issues are hereby promulgated as follows:

 

. Issues on the liquidation unit of Land Appreciation Tax

 

The liquidation unit of Land Appreciation Tax shall be the real estate development project determined by the “Construction Project Planning Permit” which is issued by the in-charge department of City-Level planning administration.

 

Ⅱ. Issues of allocation of common cost and expenses 

 

If taxpayers develop real estate projects by installments or develop multiple real estate projects at the same time, the amount paid for obtaining the land use rights by each liquidation project shall be allocated according to the occupied area method (i.e., the proportion of the area of the transferred land use rights to the total area of transferable land use rights); other common cost and expenses shall be allocated according to the building area method (i.e., the proportion of the transferred building area to the total transferable building area).

 

If the same liquidation unit comprises different types of real estate, the common cost and expenses shall be allocated by the building area method.

 

Issues on the deadline for deductions allowed for the projects

 

All costs and expenses of a liquidation project incurred subsequent to the date of completion and the final acceptance and record-filing formalities are completed shall not be deducted when making the liquidation.

 

Ⅳ. Issues on the treatment of re-transfer of real estate adopting the deemed collection method for liquidation purposes

 

For real estate development project which has been liquidated by adopting the deemed collection method, if it fails to be transferred in the process of liquidation and if it is to be transferred afterwards, the LAT shall be levied in accordance with the levying rates approved by the in-charge taxation authorities at the time of transfer after liquidation.

 

. Issues on the verification of cooperatively constructed housing

 

Cooperatively constructed housing refers to the behavior of two parties one of which provides capital and the other provides land in a joint effort of house building by sharing investment, risks as well as profits. If any of the parties only receives fixed interests and does not share responsibilities and risks, such a behavior shall not be deemed as cooperatively construction of   housings.

 

. Issues on the applicable scope of the “Management Procedures of Land Appreciation Tax Liquidation”

 

For real estate development projects, irrespective of whether the development subjects are enterprises, units or individuals, they shall file tax returns, pay and liquidate LAT in accordance with the “Management Procedures of Land Appreciation Tax Liquidation”.

 

Ⅶ. Issues on collection of transferring old houses and buildings using the deemed method

 

If the taxpayers are subject to the deemed collection method for the transfer of old houses and buildings, the deemed collection method shall be carried out in accordance with the provisions of the Measures for the Administration of Tax Levy & Collection and its detailed rules for the implementation on deemed collection method, and the collection shall not be conducted in accordance with the advanced levying rates which are applicable for real estate development projects.

 

The present announcement shall come into force on June 1, 2014, and the document of Chuan Di Shui Fa (2006) No. 67 shall be abolished simultaneously. The declaration for liquidation by taxpayers which have been accepted by the in-charge taxation authorities before the announcement shall not be adjusted retroactively.

 

Sichuan Local Taxation Bureau

2014-06-10     


 

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