General Regulations of P. R. ChinaⅩ

GUO WU YUAN LING [224] 1997

Article 1 The transferee unit or individual of any transfer of right or ownership to land and buildings within the territory of the People's Republic of China the taxpayer of the Contract Tax, and shall pay the Contract Tax as stipulated in the Rules and Regulations.

Article 2 The transfer of right and ownership to land and buildings mentioned in the Rules and Regulations refers to the following acts:
A. the transfer of the usage rights to State-owned land;
B. the transfer of the usage rights to land, including sale, donation and exchange;
C. sale and purchase of buildings;
D. donation of buildings;
E. exchange of buildings.
The transfer of the usage rights to land in Item (2) of the Article above does not include the transfer of the right to the contract responsibility of collectively-owned land in the countryside.

Article 3 The rate of the Contract Tax is 3-5%.
The applicable Contract Tax rate shall be determined by the People's Government of the provinces, the autonomous "regions and the municipalities directly under the Central Government within the range as stipulated in Article II of the Rules and Regulations according to their local conditions and shall be reported to be filed for recording to the Ministry of Finance and the State Administration of Taxation.

Article 4 Basis of Contract Tax calculation:
A. For the transfer of land usage rights, the sale of land use right, and the purchase and sale of buildings, the basis is the transaction value;
B. For the donation of the land usage rights, donation of buildings, the responsible tax collection authorities shall determine the basis in the light of the market price of the land usage rights and the purchase and sale of buildings;
C. For the exchange of the usage rights of land and exchange of buildings, the basis is the difference between the prices of the exchanged land or buildings.
When the transaction value is apparently lower than the market price without justifiable reasons 9 or the price difference of the exchanged land or buildings is apparently improper without proper reasons, the basis shall be determined by the responsible tax authorities in the light of the market prices.

Article 5 The liability for Contract Tax shall be calculated and collected in accordance with the tax rates as stipulated in Article III and the regulations of Article IV. The formula for the tax payable is:
Tax payable = Basis of the calculation × Tax rate
The tax payable is calculated in RMB. Those transfers of rights to land and buildings that are settled in foreign currency shall be converted into RMB according to the median price of the listed RMB market rate of exchange issued by the People's Bank of China on the date the tax liability arises.

Article 6 Whenever there is one of the following conditions, the Contract Tax shall be reduced or exempt:
A. the tax is exempt for those state organs, state-owned institutions or undertakings, social organizations and military units that are the transferee of the land or buildings used for offices, education, medical establishments, scientific research and military installations;
B. the tax is exempt for those state employees who buy their housing for the first time;
C. tax deduction or exemption shall be granted for those who buy their housing again owing to force majeure according to concrete conditions;
D. other items of Contract Tax reduction or exemption as determined by the Ministry of Finance.

Article 7 Those taxpayers that are granted tax reduction or tax exemption but alter the use of the land or buildings in question shall no longer belong to the category of tax reduction or tax exemption as stipulated in Article VI and shall pay in arrears the reduced or exempt tax.

Article 8 The time at which a liability to the Contract Tax arises is the date on which the taxpayer signs the contract on the transfer of land or buildings, or the date on which the taxpayer obtains other credit documents in the nature of a contract on the transfer of the right or ownership to land or buildings.

Article 9 Taxpayers shall report to the responsible tax authorities collecting the Contract Tax in the locality where the land or buildings are situated within ten days starting from the date the tax liability arises and shall pay the tax due within the assessable period determined by the responsible tax authorities.

Article 10 When a taxpayer has gone through the procedures of paying the tax, the responsible tax authorities collecting the Contract Tax shall issue a Contract Tax payment receipt to the taxpayer.

Article 11 Taxpayers shall go through the procedures of registration on the change of title of the land or buildings in question at the land administration or the housing property administration according to law, with the Contract Tax payment receipt and other documents as stipulated.
To those taxpayers who fail to produce the Contract Tax payment receipt, the land administration or the house property administration shall refuse to handle the procedures of registration on the change of title of the land or buildings in question.

Article 12 The responsible authorities collecting the Contract Tax are the Administration of Finance or the local tax authorities in the locality where the land or buildings in question are situated. The specific collecting authorities shall be determined by the People's Government of the provinces, autonomous regions, and the municipalities directly under the Central Government.
The land administration and the housing property administration shall supply related information and materials to the Contract Tax collecting authorities and assist the latter to collect the tax according to law.

Article 13 The collection and management of the Contract Tax shall be implemented in accordance with the Rules and Regulations, the related laws, and the administrative rules and regulations.

Article 14 Detailed rules for the implementation shall be formulated by the Ministry of Finance based on the Rules and Regulations.

Article 15 The Rules and Regulations becomes effective from 1 October 1997. "The Provisional Regulations on the Contract Tax" promulgated by the Central People's Government on 3 April 1950 shall be abrogated at the same time.

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