I. Basic Provisions

Ministry of Finance Notice of the State Administration of Taxation on Continuing to Implement the Policy of Land Value-added Tax on Enterprise Restructuring and Reorganization2018:57No., hereinafter referred to as"57Notice ") stipulates:

(1) In accordance with the provisions of the Company Law of the People's Republic of China, an enterprise not incorporated as a company shall be wholly transformed into a limited liability company or a company limited by shares, and a limited liability company (limited by shares) shall be wholly transformed into a company limited by shares (limited liability company); The land value-added tax will not be levied temporarily for the enterprises that transfer or change the state-owned land use right, the buildings on the ground and their attachments (hereinafter referred to as real estate) to the enterprises after the restructuring. "Overall restructuring" as mentioned in this notice refers to the act of inheritting the rights and obligations of the original enterprise without changing the original investment subject.

(2) If two or more enterprises are merged into one enterprise according to the law or the contract, and the investment entity of the original enterprise remains, land value-added tax shall not be levied temporarily on the real estate transferred or changed by the original enterprise to the merged enterprise.

(3) If an enterprise is divided into two or more enterprises with the same investment subject as the original enterprise in accordance with the law or the contract, land value-added tax will not be levied temporarily for the original enterprise that transfers or changes the real estate to the enterprise after the division.

(4) In the process of restructuring and restructuring, units and individuals invest as shares in real estate at the price of real estate, and land value-added tax will not be levied temporarily on the enterprises in which they transfer or change the real estate to the invested enterprises.

(5) The above reform and reorganization related land value-added tax policies are not applicable to the real estate transfer to any of the real estate development enterprises.

Ii. Key Policy Points

In the process of enterprise restructuring, merger, division and investment involving real estate transfer, as long as one of the transferring party or transferring party is a real estate enterprise, the above "temporarily not levied" land value-added tax policy cannot be enjoyed. The above policies should be understood with the following points in mind:

First, the transfer of real estate involves the transfer of real estate ownership, which belongs to the scope of land value-added tax (those meeting the above conditions may not be taxed temporarily). And the real estate change does not involve the transfer of real estate ownership, in any case does not belong to the scope of land value-added tax.

Second, although real estate enterprises are involved in the process of enterprise merger and division, the real estate enterprises are neither the transferring party of real estate nor the transferring party. In this case, other enterprises will not be affected to enjoy the temporary tax exemption policy.

Third, the above policy is "no tax temporarily" policy, only in this link does not tax, rather than tax exemption policy, related to the real estate and land value-added tax calculation costs continue, continue to the next link to be taxed together.

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