Interim Regulations of the People's Republic of China on Land Value- Added Taxes

Article 1 These regulations are formulated to standardize the marketing of land and real estate, reasonably regulate the gains from added value of land and safeguard the rights and interests of the State.

Article 2 Units and individuals (hereinafter referred to as taxpayers) shall pay land value-added taxes on their incomes derived from transference of use rights of State-owned land and property right of buildings and attached installations thereon (hereinafter referred to as transference of real estate) according to stipulations in these regulations.

Article 3 The land value-added taxes are levied on increased values the taxpayers derive from the transference of the real estate at rates specified in Article 7 of these regulations.

Article 4 In calculating the added value, costs and expenses listed in Article 6 of these regulations shall be deducted from the taxpayers gains from the real estate transference.

Article 5 Taxpayers' gains from his real estate transference includes incomes in cash, kind and other forms.

Article 6 Deductions to be made in the calculation of land added-value:

(1) The lease price paid for the use of the land;

(2) The cost and expenses spent in the development of the land;

(3) The cost and expenses in the construction of new buildings and attached installations, or the evaluated prices of old buildings and structures;

(4) Tax payments involved in the real estate transference;

(5) Other deductions as prescribed by the Ministry of Finance.

Article 7 Land value-added taxes shall be levied in four progressive levels:

The tax rate is 30% for that part of the added value which does not exceed 50% of the deducted amount.

The tax rate is 40% for that part of the added value which does not exceed 50% but less than 100% of the deducted amount.

The tax rate is 50% for that part of the added value which is greater than 100% but less than 200% of the deducted amount.

The tax rate is 60% for that part of the added value which exceeds 200% of the deducted amount.

Article 8 On one of the following conditions, a taxpayer is exempt from land value-added tax:

(1) The taxpayer builds houses of ordinary standard for sale and the added value does not exceed 20% of the deducted amount;

(2) Land and properties recalled and requisitioned by the State according to law for construction purposes.

Article 9 On one of the following conditions, the land value-added tax rates are set according to the evaluated prices of the real estate:

(1) Concealment and falsification in reporting the transaction prices in real estate transference;

(2) Untrue reporting of the deducted amount;

(3) The transaction prices in the real estate transference are lower than the evaluated prices for no justifiable reasons.

Article 10 A taxpayer should declare the real estate transaction at the tax authority in the place where the real estate is located within seven days of the signing of the contract for the transference of the real estate and pay the land value-added tax within the time limit ascertained by the tax office.

Article 11 The land value-added taxes are to be collected by the tax offices. The land and house property administration departments shall supply the tax offices with relevant materials and assist them in the levy of the land value-added taxes according to law.

Article 12 Land and house property administration departments shall not perform the procedure for changes in the proprietary rights for the taxpayers who fail to pay the land value-added tax in accordance with these regulations.

Article 13 The collection and administration of the land value-added taxes shall be carried out according to relevant stipulations in the Law of the People's Republic of China on Administration of Tax Collection and the relevant provisions of these regulations.

Article 14 The Ministry of Finance is responsible for interpretation of these regulations and in charge of formulating detailed rules for their implementation.

Article 15 These regulations will enter into force as of January 1, 1994. All measures of the localities for the collection of the land value-added taxes that contravene these regulations will cease to be effective at the same time.

Send to: People's government of various provinces, autonomous regions and municipalities directly under the Central Government, all ministries and commissions of the State Council and organizations directly under the State Council.

General Office of the Central Government, General Office of the Central Military Committee, General Office of the Standing Committee of the National People's Congress, General Office of the National Political Consultative Committee, the Supreme Court and the Supreme Procuratorate.

Promulgated by The State Council on 1993-12-13