Enterprises should pay taxes when they receive compensation from the government for demolition. According to the "Notice of State Taxation Administration of The People's Republic of China City, People's Republic of China (PRC) on Issues Concerning Enterprise Income Tax Treatment of Enterprise Policy Relocation or Disposal Income" and other regulations, there are several points to be noted. First, enterprise income tax shall not be included in the income tax payable in the current year; Second, the compensation for demolition can be exempted from business tax; Third, land value-added tax can be exempted according to law; Fourth, stamp duty can be waived.