Starting from October 1st, new policies for value-added tax + property tax will be implemented, mainly for housing rental companies. So how to deal with the upcoming new policy?
Original text of the policy
Starting from October 1st, housing leasing companies will apply the simplified tax calculation method when renting housing to individuals, and pay a reduced value-added tax of 1.5% at a 5% collection rate; for enterprises Public institutions and other institutions that rent housing to individuals or professional and large-scale housing leasing enterprises are levied a reduced property tax rate of 4%.
Policy Interpretation
(1) Value-Added Tax Policy
1. Specific keywords
(1) Applicable entities: housing rental companies
(2) Restrictions on lease objects: renting to individuals
(3) Lease subject matter: housing
(4) Tax calculation: Apply the simplified tax calculation method ,
(5) Pay value-added tax at a reduced rate of 1.5% according to the 5% collection rate
(6) Policy implementation date: from October 1, 2021
2. Respond in advance
(1) Contract: The above policy conditions need to be clarified
(2) General taxpayers who rent real estate can now choose to apply the simplified tax calculation method:
General taxpayers who rent real estate acquired before April 30, 2016 can choose to apply the simplified tax calculation method and calculate the tax payable at a 5% tax rate. If a general taxpayer rents out real estate acquired after May 1, 2016, the general tax calculation method will apply.
As for the issue of how to pay taxes on subleased real estate, the General Administration has made it clear that it will be determined based on the taxpayer’s leasing of real estate: general taxpayers who sublease real estate rented before April 30, 2016 can choose a simplified method. Taxation; if the real estate rented after May 1 is sublet, the simplified method of taxation cannot be selected.
(3) The time when the VAT liability occurs shall prevail: If the tax liability occurs before October 1, 2021, the levy rate of 5% will still apply. After October 1, 2021 (inclusive), the tax rate shall be 5%. % tax rate is reduced to 1.5%.
The time when the VAT liability for supplementary leasing services occurs: If the advance payment is adopted, it is the day when the advance payment is received; if a written contract is signed and the payment date is determined, it is the payment date determined in the written contract. same day.
The case enterprise rents housing to individuals and applies the simplified tax calculation method. The lease period is from July 1, 2021 to June 30, 2024, and the rent is collected on an annual basis, regardless of special circumstances:
< p>If the contract stipulates that the first year's rent will be collected in advance on July 1, 2021, the applicable collection rate is 5%;If the contract stipulates that the first year's rent will be collected before October 1, 2021, The applicable collection rate is 5%;
If the contract stipulates that the first year’s rent will be collected after (inclusive) October 1, 2021, the applicable collection rate is 1.5%;
(2) Property Tax policy
1. Policy keywords
(1) Applicable subjects: enterprises and institutions
(2) Restrictions on lessees: individuals, professional scale International housing rental enterprise
(3) Rental object: housing
(4) Policy content: Property tax is levied at a reduced rate of 4%
(5) Policy Implementation date: from October 1, 2021
2. Respond in advance
(1) Contract: the above policy conditions need to be clarified
(2) Real estate tax The time when the tax liability occurs shall prevail: if the tax liability occurs before October 1, 2021, the property tax will be levied at a rate of 12%; after October 1, 2021 (inclusive), the property tax will be levied at a reduced rate of 4%.
The time of occurrence of supplementary real estate tax (rental) tax liability: the time of occurrence of tax liability for taxpayers renting or lending properties starts from the month following the delivery of the property for rent or lease; the time of occurrence of the tax liability for real estate development enterprises for self-use, lease, or loan The tax liability for enterprises constructing commercial houses begins from the month following the use or delivery of the houses.
The case enterprise rents housing to individuals and professional and large-scale housing leasing enterprises. The lease period is from July 1, 2021 to June 30, 2024. Regardless of special circumstances, then: July 2021 For rents between October 1 and September 30, 2021, property tax will be levied at a rate of 12%; for rents after (inclusive) October 1, 2021, property taxes will be levied at a reduced rate of 4%.
Current tax policies related to real estate tax
1. From January 1, 2021 to December 31, 2021, for national and provincial science and technology business incubators, university science and technology parks Real estate and urban land use tax are exempted from real estate tax and urban land use tax for the self-use of the nationally registered makerspace and provided to the incubated objects free of charge or through leasing; the income derived from providing incubation services to the incubated objects is exempted from tax VAT.
2. Institutions that provide elderly care, childcare, housekeeping and other services to the community own the property or land or acquire it through leasing, free use, etc. and use it to provide community elderly care, childcare, housekeeping and other services. Exemption from property tax and urban land use tax. It will be implemented from June 1st to December 31st, 2025.
3. From January 1st to December 31st, 2021, for agricultural product wholesale markets and farmers’ markets (including self-owned and leased, the same below), the real estate and land specially used for operating agricultural products, Property tax and urban land use tax are temporarily exempted. For the properties and land used by agricultural product wholesale markets and farmers' markets that also operate other products, property tax and urban land use tax will be exempted based on the proportion of the area of other products and agricultural product trading sites.
4. The "Announcement on Preferential Tax Policies for Public Rental Housing" (Announcement No. 61 of the Ministry of Finance and the State Administration of Taxation) exempts public rental housing from property tax. Rental income derived from operating public rental housing is exempt from value-added tax. Public rental housing operation and management units should separately calculate the rental income of public rental housing. If they fail to do separate calculations, they shall not enjoy the preferential policies of exemption from value-added tax and property tax. The execution period is from January 1st to December 31st.
According to the "Announcement on Extending the Implementation Period of Some Preferential Tax Policies" (Announcement No. 6 of the Ministry of Finance and the State Administration of Taxation of 2021) 1. "Notice of the Ministry of Finance and the State Administration of Taxation on Corporate Income Tax Policies Concerning the Deduction of Equipment and Appliances" (Finance and Taxation [2018] No. 54) and other 16 documents have expired, the implementation period will be extended to December 31, 2023.
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