State Administration of Taxation, Official Reply on the Issue of the Income Tax Treatment of Sale-leaseback Transactions by Foreign-invested Enterprises that Engage in Real Property Development
国家税务总局关于从事房地产开发的外商投资企业售后回租业务所得税处理问题的批复
July 02, 2007 | BY
clpstaff &clp articles &Tax policy on sale-leaseback transactions by foreign-invested real property developers clarified.
Issued: May 31 2007
Main Contents: If an enterprise assigns one or more of the following interests in, or risks attaching to, an asset through a sale-leaseback transaction, it shall be deemed to have transferred all or part of the ownership of the immovable property, regardless of whether it carried out the procedures for the change of legal title thereto (e.g. procedures for title registration or change of ownership):
(1) the right to obtain the returns from the increase in value of the asset;
(2) bearing the losses arising from various types of damage (including physical damage and decrease in value);
(3) the right to possess the asset;
(4) the right to use the asset during the remaining period of its life; and/or
(5) the right to dispose of the asset.
Related Legislation: PRC Law on the Administration of the Levy and Collection of Taxes, (Revised in April 2001), Apr 28 2001, CLP 2001 No.5 p.12 & CLP 1995 No.3 p.12; and PRC Implementing Rules for the Law on the Administration of the Levy and Collection of Taxes Implementing Rules, Sep 7 2002, CLP 2002 No.8 p.12
Full Translation: See page 81
clp reference:3210/07.05.31promulgated:2007-05-31This premium content is reserved for
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