Is there a document that the compensation is not subject to business tax? 15

Whether it is ** demolition compensation, if so, no business tax and income tax are levied, there are relevant documents. Other corporate actions are subject to income tax and business tax as mentioned above.

The enterprise income tax is stipulated in the Notice on the Treatment of Enterprise Income Tax Related to the Income from Policy-based Relocation of Enterprises Cai Shui [2007] No. 61

The enterprise income tax shall be treated as follows:

1.If the relocated enterprise uses the relocation income of the enterprise to purchase or construct fixed assets and land of the same or similar nature and purpose as before the relocation (hereinafter referred to as the replacement of fixed assets), as well as to carry out technical transformation or resettlement of employees, the relocation income of the relocated enterprise shall be allowed to deduct the expenses of replacing fixed assets, technical transformation and resettlement of employees, and the balance shall be included in the taxable income of the enterprise.

2.If an enterprise does not use the above-mentioned relocation income to replace fixed assets or technological transformation due to changes in production and operation directions, but uses the relocation income for the purchase of other fixed assets or other technical transformation projects, the relevant costs may be deducted from the enterprise's policy-based relocation income, and the balance shall be included in the taxable income of the enterprise.

3.If the relocated enterprise does not have a plan or project approval report for the replacement of fixed assets, technical transformation or purchase of other fixed assets, the relocation income plus the income from the sale of various types of demolition fixed assets, the balance after deducting the depreciated value of various types of demolition fixed assets and disposal costs shall be included in the taxable income of the enterprise in the current year, and the enterprise income tax shall be calculated and paid.

4.The fixed assets purchased by the relocated enterprise using the income of the policy relocation can be depreciated or promoted in accordance with the current tax regulations, and deducted before the enterprise income tax.

5.Within five years from the second year of the planned relocation, the relocation income obtained by the relocation enterprise shall not be included in the taxable income of the enterprise in the current year, and if the relocation is completed within the five-year period, the relocation income of the enterprise shall be incorporated into the taxable income of the relocated enterprise in the current year after deducting the relevant costs and expenses according to the above provisions, and the enterprise income tax shall be paid.

As for the accounting treatment, it should be handled in accordance with the method of disposing of fixed assets through the "fixed assets disposal" account.

Legal analysis: There is no need to pay individual income tax for demolition compensation. However, if the person being demolished uses the demolition compensation to purchase a new house or accept a resettlement house after receiving the demolition compensation, he or she needs to pay the deed tax on the difference in price and the rebate part in addition to the demolition compensation, and the part within the compensation is exempt from the deed tax.

Legal basis: Article 4 of the Individual Income Tax Law of the People's Republic of China The following personal income is exempt from individual income tax:

1. Prizes awarded by provincial-level people's **, *** ministries and commissions, units at or above the army level of the Chinese People's Liberation Army, as well as foreign organizations and international organizations, in the fields of science, education, technology, culture, health, sports, environmental protection, etc.;

2. Interest on treasury bonds and financial bonds issued by the state;

3. Subsidies and allowances issued in accordance with the unified provisions of the state;

4. Welfare expenses, pensions and relief funds;

5. Insurance indemnity;

6. Transfers and demobilization expenses for servicemen;

7. Settling-in allowance, retirement pay, retirement salary, retirement salary, and retirement living allowance paid to cadres and employees in accordance with the unified provisions of the state;

8. Income of diplomatic representatives, consuls** and other personnel of embassies and consulates in China who are exempt from tax in accordance with the relevant laws and regulations of China;

9. Income exempted from tax as stipulated in the international convention and agreement signed by China**;

10. Tax-exempt income approved by the financial department.

For the compensation for demolition, there is no need to pay individual income tax. However, if the person being demolished uses the demolition compensation to purchase a new house or accept a resettlement house after receiving the demolition compensation, he or she needs to pay the deed tax on the part of the price difference other than the demolition compensation, and the part within the compensation is exempt from the deed tax.

1. Do you pay taxes for the demolition and resettlement of commercial buildings?

If an individual who obtains monetary compensation in accordance with the demolition agreement and purchases a new house, the part of the purchase price that does not exceed the demolition compensation shall be exempted from deed tax, and the part exceeding the demolition compensation shall be taxed at the applicable tax rate. If the demolished person re-inherits the rebuilt house according to the agreement, and does not pay the difference in the price of the property right exchange, the deed tax shall be exempted; If the difference in the exchange price of property rights should be paid, the part of the supplementary payment shall be taxed at the applicable tax rate.

Article 4 of the Individual Income Tax Law of the People's Republic of China exempts the following individual income from individual income tax:

1. Bonuses in science, education, technology, culture, health, sports, environmental protection and other aspects issued by provincial-level people's ** and *** ministries and commissions and units above the military and material level of the Chinese People's Liberation Army, as well as foreign organizations and international organizations;

2. Interest on treasury bonds and financial bonds issued by the state;

3. Subsidies and allowances issued in accordance with the unified provisions of the state;

4. Welfare expenses, pensions and relief funds;

5. Insurance indemnity;

6. Transfers and demobilization expenses for servicemen;

7. Settling-in allowance, retirement pay, retirement salary, retirement salary, and retirement living allowance paid to cadres and employees in accordance with the unified provisions of the state;

8. Income of diplomatic representatives, consuls** and other personnel of embassies and consulates in China who are exempt from tax in accordance with the relevant laws and regulations of the People's Republic of China;

9. Income exempted from tax as stipulated in the international conventions and agreements to which China is a party;

10. Tax-exempt income approved by the financial department.

In the policy-based relocation compensation, the compensation income of immovable property is exempt from LAT exemption. Article 8 of the Provisional Regulations on Land Appreciation Tax stipulates that any of the following circumstances shall be exempted from Land Appreciation Tax:(2) Real estate that needs to be requisitioned or recovered in accordance with the law due to national construction.

The Detailed Rules for the Implementation of the Provisional Regulations on Land Appreciation Tax stipulate that the real estate requisitioned or recovered in accordance with the law due to the needs of national construction as mentioned in Article 8 (2) of the Regulations refers to the real estate that has been approved for expropriation or the land use right recovered due to the needs of urban implementation planning and national construction. If the taxpayer relocates due to the needs of urban implementation planning and national construction, and the taxpayer transfers the original real estate on his own, it shall be exempted from LAT in accordance with this regulation.

The preferential corporate income tax for policy-based relocation is only a tax deferral. According to the announcement of the State Administration of Taxation on the issuance of the Administrative Measures for Income Tax on Policy-based Relocation of Enterprises (Announcement No. 40 of 2012 of the State Administration of Taxation), the relocation income and relocation expenses incurred by an enterprise during the relocation period may not be included in the taxable income of the current period for the time being, and the relocation income and expenditure shall be summarized and liquidated in the year of completion.

The notice of the State Administration of Taxation of the Ministry of Finance on the tax policies related to urban housing demolition (CS 2005 No. 45) stipulates that the demolition compensation obtained by the demolished person in accordance with the standards stipulated by the state's relevant urban housing demolition management measures shall be exempted from individual income tax.

Where land or houses have been expropriated or requisitioned by the people's government at or above the county level, and the ownership of the land or houses is re-inherited, the provinces, autonomous regions, and municipalities directly under the Central Government may decide to exempt or reduce the deed tax.

Demolition compensation contracts are not enumerated, so stamp duty should not be paid.

According to the reply of the State Administration of Taxation on the business tax issues related to the compensation fee for the land and above-ground attachments obtained by the state for the land expropriated by the state (Guo Shui Han 2007 No. 969), the state needs to recover the land use right due to public interests or urban construction planning, and for the units and individuals using the state-owned land, the land use right is returned to the landowner. At the same time, the Notice of the State Administration of Taxation on Printing and Distributing the Annotations to Business Tax Items (Trial Draft) stipulates that no business tax shall be levied on the return of land use rights to landowners by land users.

In addition, according to the notice of the State Administration of Taxation on the business tax issues of land users returning land use rights to land owners, when taxpayers return land use rights to land owners, as long as they issue an official document for the recovery of land use rights by local people at or above the county level (inclusive), regardless of whether the funds for paying land requisition compensation fees are financial funds, the behavior is an act of land users returning land use rights to land owners, in accordance with the "State Administration of Taxation on Issuance". The Notice on the Annotations to Business Tax Items (Trial Draft) stipulates that no business tax shall be levied.

Therefore, no business tax is levied on the compensation fees for land and above-ground attachments (including immovable property) paid to units and individuals by the state for recovering the land use rights owned by units and individuals due to public interest or urban planning needs, and in accordance with the standards stipulated in the Land Management Law.

In response to your question, the State Administration of Taxation has not yet made clear provisions on whether the compensation obtained by enterprises in the demolition and relocation shall be subject to business tax.

Then, according to the first paragraph of Article 8 of the [1993] No. 149 document of the State Administration of Taxation, the land user shall not be subject to business tax on the return of the land use right to the landowner. However, this document is only for the compensation given to users by the state for the resumption of land use rights, and no business tax is levied. As for whether the compensation paid to the demolished enterprise includes compensation for attachments on the land and compensation for land use rights, it is not clearly stated in this document.

In addition, from the provisions of the Guo Shui Han [1997] No. 87 document, there are some similarities with the compensation fee for demolition and relocation, which stipulates that the compensation income of buildings, structures, seedlings and other land attachments on the land acquired by the land contractor shall be calculated and levied according to the tax item of sales of immovable property - other immovable property in the business tax. But there are limits to the scope of use in this file. It is not fully applicable to the form and characteristics of the income from demolition compensation obtained by the enterprise in the process of demolition.

Therefore, judging from the current actual work situation, the State Administration of Taxation has not made clear provisions in this regard. As a result, local taxation authorities in various places are at a loss in terms of collection and management. Therefore, the tax authorities in some places have formulated some regulations on compensation for demolition and relocation.

Although the regulations formulated by the local taxation authorities vary greatly, they all follow two principles. First, this kind of demolition and transformation must be carried out under the leadership of the first class. The second is that the compensation paid for demolition must be paid by the first financial department.

Under this premise, business tax is generally exempted.

To sum up, I would like to suggest you the following. At present, the State Administration of Taxation has not yet made clear provisions on compensation for demolition. Therefore, the local taxation bureau where your business is located will definitely have its own regulations in this regard.

It is best to consult with the tax administration department or specialist of the local tax bureau in your local area. Or talk to them about whether there is a local sales tax in this situation. In this way, tax risks can be avoided.

Enterprise demolition is generally divided into two categories, on the one hand, the liquidation of fixed assets, and on the other hand, the loss of production and business suspension. Both are subject to sales tax.

Answer: The income from demolition compensation is generally not subject to business tax. This is because the income from compensation for immovable property obtained by units and individuals due to land expropriation refers to the compensation fees paid to units and individuals for land and land attachments (including immovable property) when the state recovers the land use rights occupied by units and individuals due to construction needs.

The owner of the land is the state, and the state expropriates the land of units and individuals, and the land use right is recovered, and for the units and individuals who occupy the land, the land use right is returned to the land owner;For the state, it is the recovery of the state-owned land use right, and the compensation fee paid by the state does not mean that the state uses money to purchase the state-owned land use right and land attachments, but the compensation for the return of state-owned land use rights and the land attachments lost by units and individuals, and the state has no transaction with the units and individuals occupying the land, and the units and individuals have not transferred the land use rights and sold immovable property for compensation, so no business tax is levied on the land and real estate compensation fees obtained by units and individuals due to land requisition by the state。

In addition, the State Administration of Taxation does not clearly stipulate the income tax involved in the compensation income of domestic enterprises. However, the State Administration of Taxation has clear provisions on the income from demolition compensation obtained by foreign-funded enterprises. Guo Shui Han [2003] No. 115 stipulates that, if an enterprise obtains relocation compensation income, if it repurchases or constructs fixed assets of the same or similar nature and purpose as before the relocation (hereinafter referred to as "replacement fixed assets") after relocation, the above-mentioned relocation compensation income plus the sales income of various types of demolition fixed assets after deducting the depreciated value of various types of demolition fixed assets and disposal costs, and the original price of the enterprise's replacement of fixed assets shall be deducted.

2. If an enterprise obtains income from relocation compensation and does not replace fixed assets of the same or similar nature and purpose as before the relocation after relocation, in accordance with Article 44 of the Detailed Rules for the Implementation of the Income Tax Law of the People's Republic of China on Foreign-invested Enterprises and Foreign Enterprises, the above-mentioned income from relocation compensation plus the income from the sale of various types of demolition and relocation fixed assets after deducting the depreciated value of various types of demolition and relocation fixed assets and disposal costs shall be included in the current taxable income of the enterprise and the enterprise income tax shall be calculated and paid.