The State Administration Of Taxation Has Set The Minimum Limit For Land Value-Added Tax Pre Collection, Which Is Higher In The East Than In The West

Following the issuance of the Notice on Issues Related to the Liquidation of Land Value Added Tax on May 26, the State Administration of Taxation again issued the Notice on Strengthening the Collection and Management of Land Value Added Tax on June 3.

The notice clearly pointed out that in order to give play to the regulatory role of land value-added tax in the pre collection stage, local governments must adjust the current pre collection rate. In addition to affordable housing, the pre collection rate of eastern provinces should not be less than 2%, central and northeastern provinces should not be less than 1.5%, and western provinces should not be less than 1%. All regions should determine appropriate pre collection rates based on different types of real estate.

The pre collection of land value-added tax refers to the income obtained by the taxpayer before the completion of the project and settlement. If the land value-added tax cannot be calculated due to cost determination or other reasons, it belongs to the "pre collection scope" of land value-added tax.

It is worth noting that the notice issued this time clearly points out that land value-added tax is a powerful tool to ensure the fair distribution of income and promote the healthy development of the real estate market. In this regard, some experts in the industry said that the profit space of real estate development enterprises and the profit space of land secondary market sellers can be narrowed to a certain extent by improving the pre collection rate of land value-added tax and timely liquidation. In addition, the practice of hoarding land or hoarding for extra profits will also be suppressed.

The notice requires that the verified collection must be carried out in strict accordance with the conditions stipulated in the tax laws and regulations. No unit or individual shall expand the verified collection scope without authorization, and the practice of "giving priority to verification and checking" and "seeking quick and saving" in liquidation is strictly prohibited. Any unauthorized use of verified collection as the main way of land value-added tax settlement in the region must be corrected immediately.

However, if it is really necessary to verify the collection of land value-added tax, the notice stipulates that the verified collection rate should be determined strictly and from a high level in strict accordance with the requirements of tax laws and regulations. In order to standardize the verification work, the verified tax collection rate should not be less than 5% in principle. Each provincial tax authority should formulate the verified tax collection rate according to the local reality and different real estate types.