(1) Relevant policies

1According to the Rules for the Implementation of the Provisional Regulations on Land Value-added Tax, if a taxpayer develops or transfers real estate in batches after receiving the land use right in parcels, the amount deducted may be calculated and apportioned according to the proportion of the land use right transferred to the total area, or according to the floor area, or in other ways confirmed by the tax authorities.

2State tax issue2009:91Document No. 1 stipulates: Taxpayers who develop projects in stages or develop multiple projects at the same time, or build different types of real estate in the same project, shall adopt a reasonable distribution method according to the beneficiaries, and share the common costs.

3Tax regulations of the Soviet Union2015:8Document No. 2 states that the cost of land shall be apportioned only between the buildings and their fixtures that can be registered for ownership. When the land cost is apportioned among different liquidation units or different types of property in the same liquidation unit, if it can be directly collected, it shall be directly included in the land cost of the liquidation unit or the property of this type; If it cannot be directly collected, the apportionment may be calculated according to the floor area method or other reasonable methods recognized by the tax authorities.

(2) Factors that should be taken into account in apportioning land cost for underground buildings

1Whether the land transfer contract is clear
If the land transfer contract specifies the price of the above-ground part of the land and the price of the underground part of the land transfer fee, then the underground construction should undoubtedly share the land cost. If the land transfer contract clearly stipulates that the underground part does not pay the land transfer fee, then the underground building should not share the land cost.

In most cases, the land transfer contracts of real estate enterprises only agree on the total price of land, but do not specify the related issues of above ground and underground. At this time, other factors should be used to determine whether the underground construction apportioned the land cost.

2Whether it is included in the floor area ratio

Underground buildings are generally included in the gross floor area, but not in the plot ratio. At present, most opinions hold that if the underground building is not allowed, then the underground building generally does not share the cost of land; If the underground building part counts for capacity, then the capacity part should share the cost of the land.

3Whether to apply for land rights certificate

This factor is similar to whether to count capacity: if the land area of the underground building is specified on the real estate registration certificate, then the underground building should share the land cost; If the real estate registration certificate does not specify the floor area of the underground building, then the underground building should not share the cost of land.

It is important to note that the tax regulations of the Soviet Union [2015:8No. 1 document said "can handle ownership registration procedures" does not distinguish between housing and land rights. As long as the real estate registration certificate can be applied for, whether it is independent property right or subsidiary property right, and whether it indicates the land area or not, the land cost should be apportioned.

4, the type of underground building

The author thinks: if the underground building belongs to the auxiliary facilities of the main house (such as the underground garage parking space, can not be sold separately, can not be registered separately, as the auxiliary facilities of the main house), then in principle should not be apportioned land cost; If underground buildings can be sold separately (e.g. underground commercial buildings, etc., can be licensed independently), then the cost of the land should, in principle, be shared.

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