Interpretation of 《The Announcement of the State Administration of Taxation on Reducing the Lower Limit of the Pre-levy Rate of Land Appreciation Tax》

Interpretation of 《The Announcement of the State Administration of Taxation on Reducing the Lower Limit of the Pre-levy Rate of Land Appreciation Tax》

In order to thoroughly implement the requirements of the Third Plenary Session of the 20th Central Committee of the Communist Party of China and the executive meeting of the State Council, and to give better play to the role of LAT regulation, the State Administration of Taxation has formulated and issued 《The Announcement of the State Administration of Taxation on Reducing the Lower Limit of the Pre-levy Rate of LAT》 (hereinafter referred to as the "Announcement").

The interpretation is as follows:

一. What is the background of 《The Announcement》?

     In order to ensure the timely and balanced storage of LAT revenue, in accordance with the relevant provisions of the Detailed Rules for the Implementation of the Provisional Regulations of the People's Republic of China on Land Appreciation Tax, the tax department shall levy LAT in advance a certain proportion of the income obtained by taxpayers from the transfer of real estate before the completion and settlement of the project.In 2010, in order to better play the regulatory role of the pre-collection of LAT in advance, the State Administration of Taxation issued 《The Notice on Strengthening the Collection and Administration of LAT》 (GSF [2010] No. 53), which stipulates the lower limit of the pre-levy rate, except for affordable housing, the lower limit of the provinces in the eastern region is 2%, the lower limit of the provinces in the central and northeast regions is 1.5%, and the lower limit of the provinces in the western region is 1%.At present, with the changes in the real estate market situation, the value-added level of different real estate projects has been structurally differentiated, and the value-added rate of some real estate projects has declined significantly, so it is necessary to adjust the lower limit of the pre-levy rate, so as to reserve space for the scientific adjustment of the pre-levy rate and promote the steady and healthy development of the real estate market.

二、What are the main contents of 《The Announcement》?

《The Announcement》 lowers the lower limit of the pre-levy rate by 0.5 percentage points, except for affordable housing, the lower limit of the pre-levy rate for provinces in the eastern region is 1.5%, the lower limit of the pre-levy rate for provinces in the central and northeastern regions is 1%, and the lower limit of the pre-levy rate for provinces in the western region is 0.5%.

三、After the issuance and implementation of 《The Announcement》, how should all localities adjust the pre-levy rate?

After the issuance and implementation of 《The Announcement》, all localities can adjust the actual implementation of the pre-levy rate in combination with the actual local situation, and if it is necessary to adjust, the local taxation department in conjunction with the financial department shall determine the specific pre-levy rate of various types of real estate on the basis of scientific calculation under the guidance of the local government and the actual tax burden level of local real estate projects.