Case:
Wang Dacheng is going to start a consulting company, which needs not only funds, personnel, but also business premises.
therefore, Wang Dacheng decided to invest his own real estate in the company name as the subscribed capital. So how to control this behavior of investing in real estate in tax payment?
1. Personal income tax
Does Wang Dacheng need to pay personal income tax if he sets the price of his purchased property and invests it in the company name as the subscribed capital?
Wang Dacheng invested the real estate in the company's name by investing in shares, which is equivalent to the real estate in exchange for the equity of the invested enterprise. It is an act of paid transfer of real estate, and personal income tax should be levied according to the item of "income from property transfer".
however, the income obtained by individuals from transferring the house that they have used for more than 5 years and are the only living room for their families is exempt from personal income tax.
therefore, if Wang Dacheng invests in real estate, the income from real estate transfer shall be confirmed according to the assessed fair value when the transfer occurs. The balance of the income from property transfer after deducting the original value of the property and reasonable taxes and fees is taxable income, and personal income tax is paid according to the income from property transfer.
However, if Wang Dacheng transfers the house for personal use for more than 5 years, and it is the only living room for the family, it will be exempted from personal income tax.
2. Value-added tax
Does Wang Dacheng need to pay value-added tax if he invests his purchased property in the company name as subscribed capital?
according to article 1 of the pilot implementation measures for changing business tax to value-added tax, "selling services, intangible assets or real estate means providing services with compensation and transferring intangible assets or real estate with compensation."
article 11 of the pilot implementation measures for changing business tax to value-added tax stipulates: "compensation means obtaining money, goods or other economic benefits."
therefore, investment in real estate is equivalent to real estate in exchange for the equity of the invested enterprise, which has obtained "other economic benefits" and should pay value-added tax.
However, if the property invested in shares is "housing", it will be treated as follows:
1. If the property invested in shares is a house purchased by individuals for less than 2 years, the value-added tax will be paid in full at the rate of 5%;
2. If the property invested in shares has been purchased by individuals for more than 2 years (including 2 years), the value-added tax will be exempted.
The above 1 and 2 policies are applicable to areas outside Beijing, Shanghai, Guangzhou and Shenzhen.
3. If the property invested in shares is sold for less than 2 years, the value-added tax shall be paid in full at the rate of 5%;
4. If the property invested in shares is an ordinary house that has been purchased for more than 2 years (including 2 years), the value-added tax shall be paid at the rate of 5% based on the difference between the sales income and the purchase price of the house;
5. If the property invested in shares is an ordinary house purchased for more than 2 years (including 2 years) and sold externally, the value-added tax shall be exempted.
The above policies of 3, 4 and 5 are only applicable to Beijing, Shanghai, Guangzhou and Shenzhen.
iii. Land value-added tax
Does Wang Dacheng need to pay land value-added tax when he appraised the real estate he bought and invested in the company name as the subscribed capital?
according to the relevant regulations of land value-added tax, the units and individuals who transfer the right to use state-owned land, buildings and their attachments on the ground and obtain income are taxpayers of land value-added tax. The so-called income refers to the transfer of real estate by sale or other means.
Therefore, Wang Dacheng invested the real estate in the company's name by investing in shares, which is equivalent to the real estate in exchange for the equity of the invested enterprise, which belongs to the paid transfer of real estate and should pay the land value-added tax.
However, according to the relevant provisions of the Notice of State Taxation Administration of The People's Republic of China of the Ministry of Finance on Land Value-added Tax Policies for Enterprise Restructuring and Reorganization (Caishui [215] No.5):
From January 1, 215 to December 31, 217, units and individuals invested in state-owned land and houses during restructuring and reorganization, and their ownership of state-owned land and houses was transferred and changed to the invested enterprises.
in other words, if Wang Dacheng invested in real estate during the period from January 1, 215 to December 31, 217, the land value-added tax will not be levied temporarily.
at the same time, if the real estate invested by Wang Dacheng is "housing", according to the relevant provisions of the Notice on Adjusting the Tax Policy of Real Estate Transactions (Caishui [28] No.137), the land value-added tax will be temporarily exempted for individual housing sales.
iv. Property tax
Does Wang Dacheng need to pay property tax if he invests his purchased property in the company name as subscribed capital?
according to the relevant provisions of "State Taxation Administration of The People's Republic of China's Reply on Several Issues Concerning Anhui Real Estate Tax Business" (No.368 [1993] of the State Administration of Taxation).
for the real estate invested in the joint venture, it should be treated differently when collecting the property tax according to the specific conditions of the joint venture. For the joint venture of real estate investment, investors participate in the investment profit sharing, and * * * takes risks, the property tax shall be levied according to the original value of the property; In the case of real estate investment, collecting fixed income and not taking the risk of joint venture, the real estate rent is actually obtained in the name of joint venture, and the lessor shall pay the property tax according to the rental income according to the relevant provisions of the Provisional Regulations of the People's Republic of China on Property Tax.
therefore, how to pay the property tax on the property invested by Wang Dacheng depends on the form of the investment contract signed by Wang Dacheng. There are differences in the payment of property tax under different forms.
V. Deed tax
Wang Dacheng bought his own property as a share at a fixed price and invested it in the company name as the subscribed capital. How to pay the deed tax?
According to the relevant provisions of deed tax:
1. The transfer of land and house ownership between the same natural person and its sole proprietorship enterprise and one-person limited liability company is exempt from deed tax.
2. The operators of individual industrial and commercial households transfer the ownership of houses and land under their personal names to the names of individual industrial and commercial households, or the individual industrial and commercial households transfer the ownership of houses and land under their names back to the original operators' personal names, which are exempt from deed tax.
if a partner of a partnership transfers the ownership of the house and land under his name to the partnership, or the partnership returns the ownership of the house and land under his name to the original partner, the deed tax shall be exempted.
therefore, Wang Dacheng's investment in the real estate under his own name in the name of his own company is exempt from deed tax.
VI. Land use tax
Wang Dacheng bought his own real estate at a fixed price and invested it in the company name as the subscribed capital. Does the property need to pay land use tax?
according to article 2 of the provisional regulations on urban land use tax, units and individuals that use land within cities, counties, towns and industrial and mining areas are taxpayers of urban land use tax and should pay land use tax in accordance with the provisions of these regulations.
in addition, according to the relevant provisions of the notice of the state administration of taxation on the issuance of the interpretation and interim provisions on some specific issues concerning land use tax ((1988) Guo shui di zi No.15), the tax exemption and exemption of land use tax for individual-owned residential houses and courtyard land shall be determined by the tax bureaus of provinces, autonomous regions and municipalities directly under the central government.
Therefore, 1. If the real estate invested by Wang Dacheng is not a house, it needs to pay the land use tax according to the relevant provisions of the land use tax; 2. If the real estate invested by Wang Dacheng is a house owned by an enterprise, if it does not meet other relevant provisions on exemption from land use tax, it should go through the formalities for the transfer and change of registration of the house ownership, and the urban land use tax should be levied from the month after the real estate ownership registration authority issues the house ownership certificate.
Policy basis
1. Notice of State Taxation Administration of The People's Republic of China, Ministry of Finance on Personal Income Tax Policies for Personal Non-monetary Assets Investment (Caishui [215] No.41)
2. Notice of State Taxation Administration of The People's Republic of China on Issues Related to Personal Income Tax on Income from Personal Housing Transfer (Guoshuifa [26] No.18)
3. Ministry of Finance, State Taxation Administration of The People's Republic of China, Notice of the Ministry of Construction on Issues Concerning the Collection of Individual Income Tax on Income from Housing Sale (Caishuizi [1999] No.278)
4. Notice on Tax Policies for Low-rent Housing, Affordable Housing and Housing Leasing (Caishui [28] No.24)
5. Notice of the Ministry of Finance State Taxation Administration of The People's Republic of China on Deed Tax Policies for Restructuring and Reorganization of Enterprises and Institutions (Caishui [28]). Notice of State Taxation Administration of The People's Republic of China, Ministry of Finance on the Deed Tax Policy of Enterprises' Financing by Sale and Leaseback (Caishui [212] No.82)
VII. Stamp Duty
How does Wang Dacheng pay the stamp duty when he buys his own property as a share and invests it in the company name as the subscribed capital?
according to the provisional regulations of the people's Republic of China on stamp duty (the State Council order No.11), the document of property right transfer shall be affixed with .5‰ of the amount contained in the document.
therefore, Wang Dacheng has invested his purchased property in the company name at a fixed price, and as the subscribed capital, he should pay stamp duty according to the amount stated in the property right transfer document.
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