The real estate industry involves a wide range of taxes and is a high-risk area for tax-related risks, especially the treatment of value-added tax, land value-added tax and urban land use tax, which is prone to cause disputes in practice. In recent years, with the continuous advancement of tax inspection by tax authorities across the country on the real estate industry, some major and important cases of tax inspection in the real estate industry have broken out one after another, and the real estate industry is facing a severe tax collection and management situation.
Risk point 1: Illegal payment of withholding expenses.
Case: A real estate enterprise has developed a total of 3 real estate projects, and when the project is completed and carried forward to develop products, the enterprise has withheld part of the project payment payable without obtaining invoices. The withholding expenses include land acquisition fees, demolition compensation fees, preliminary engineering costs, construction and installation costs, infrastructure construction fees and public supporting facilities fees, with a total withholding amount of about 500 million yuan for the three projects and a total contract amount of about 4.6 billion yuan.
Specific analysis: There are two main risk points that we need to pay attention to in this case, namely, over-limit withholding expenses and over-scope withholding expenses. Real estate enterprises should pay attention to the upper limit of the withholding ratio stipulated in the tax regulations, and for the contracted project, the withholding fee for the insufficient amount of the invoice cannot exceed 10% of the total amount of the contractAt the same time, it is also necessary to pay attention to the withholding within the scope of the expenses allowed by the policy, and only the contracted projects, public supporting facilities, approval and construction costs and property improvement costs can be withheld, and the withholding expenses should not be exceeded the scope.
Risk point 2: Duplicate deduction of "materials for A" for the project business
Case: A real estate enterprise B and the construction company signed a construction contract of "A for materials", stipulating that the contract amount is 10 million yuan (including the construction materials purchased and provided by enterprise B) to the construction enterprise, and the value-added tax amount is 900,000 yuan. The project was completed, the final settlement price was 10.9 million yuan, and the amount of "A supply materials" was 2 million yuan. In addition, enterprise B purchased 2 million yuan of materials from the material supplier, received 13% of the VAT input invoice, and the cost amount included in the "development cost" account of enterprise B was 12 million yuan.
Specific analysis: the enterprise adopts the method of contracting labor and not materials, and in the case that the materials, water and electricity and other materials provided by the material supplier have been included in the development cost with the invoice, the construction enterprise will issue invoices again according to the total amount of labor costs and material prices, and bear the tax of the over-opened part, and repeatedly list the development costs. Therefore, in the case of signing a contract with the amount of "material supplied by A", it is recommended that the "difference settlement method" be adopted as far as possible when the real estate enterprise and the construction enterprise settle the project, that is, the amount of the material supplied by A will not be included in the settlement price of the project and the sales amount of the construction enterprise, so as to avoid the tax risk of duplicate expenditure of development costs.
Risk point 3: Lack of legal and valid pre-tax deduction certificates.
Case: C real estate enterprise entrusts a real estate agent to carry out commercial housing sales and on-site formalities, and the two parties agree to calculate the fee according to the progress of the entrusted agency. In that year, the real estate enterprise C accrued 3.9 million yuan of entrusted sales fees, which were included in the "sales expenses" account and deducted in full before the enterprise income tax. However, the amount was not actually paid in that year, nor did it obtain any legal and valid certificates, resulting in the tax-related risk of illegal pre-tax deduction.
Specific analysis: whether a legal and effective pre-tax deduction voucher can be obtained directly determines the cost and expense. Therefore, enterprises need to pay attention to whether the upstream suppliers or service providers can issue invoices in a timely manner when conducting business transactions, and at the same time, they need to pay attention to whether the invoices obtained comply with the regulations, whether the face information is consistent with the economic business, and whether the invoices are invalid.
Risk point 4: Borrowing costs that meet the conditions for capitalization are not capitalized
Case: After being reminded by the tax authorities, the real estate development enterprise found that the data of the "financial expenses" account in 2020 was 1.7 million yuan, of which 1.1 million yuan was the interest generated by the project loan, and the project loan funds were used for the construction of project A, which met the capitalization conditions, but the relevant interest incurred by the loan was recorded by the financial personnel in the "financial expenses" account and was not capitalized.
Specific analysis: If the borrowing costs incurred by the enterprise meet the conditions for capitalization, they must be capitalized;If it does not meet the conditions for capitalization, it can be deducted before income tax as a period expense. For the borrowing costs incurred in borrowing funds for the construction and development of products, the cost objects should be accurately divided, the accounting standards and tax laws should be strictly observed, and the amount of capitalization should be accurately calculated in order to control the tax risks.
Risk point 5: The full amount of the cost of purchasing gifts to customers will be deducted.
Case: E real estate enterprise purchases clothing, umbrellas, etc. as gifts to customers, and includes the expenditure in the period expense account, and deducts the full amount before filing enterprise income tax.
Specific analysis: The customer who purchased the gift should be treated as a sale, and the gift giving expenses shall not be deducted beyond the limit. As far as value-added tax is concerned, if there is no sales amount of goods deemed to be sold, it shall be determined in the order of the average sales of similar goods** in the current month, the average sales of similar goods** in the most recent period, and the composition of tax**;For corporate income tax, unless otherwise specified, sales revenue shall be determined at the fair value of the transferred assets. In the example, the gift giving expenses of the real estate enterprise are business entertainment expenses, which can only be deducted before tax according to 60% of the amount incurred and shall not exceed 5% of the operating income of the current year.
Risk point 6: The contract stipulates that the uncollected housing payment is not recognized
Case: F real estate company received 80 million yuan in advance this month, and signed a house purchase contract with an amount of 23.8 billion yuan (including 8 million yuan of housing payment receivable but not received in the month of installment payment agreed in the contract). During the declaration period of the next month, the financial personnel only recognized the income of 80 million yuan of the pre-collected housing payment and declared the enterprise income tax, and the contract stipulated that the uncollected housing payment of 8 million yuan in the month of installment payment was not recognized as sales revenue, resulting in tax-related risks.
Specific analysis: The income obtained by a real estate enterprise through the formal signing of the "Real Estate Sales Contract" or the "Real Estate Pre-sale Contract" shall be recognized as the realization of sales revenue. Among them, if the development products are sold in installments, the realization of revenue shall be recognized according to the price and payment date agreed in the sales contract or agreement.
Risk point 7: Rental income is not declared in accordance with the regulations
The seventh risk point brings us to the fact that rental income is not being declared in accordance with the regulations. Let me give you a typical case: the project of a real estate enterprise has been completed and recorded, because the low-rise houses are close to the business district and have not yet been recorded, the unqualified houses and parking spaces will be temporarily rented, but the relevant rental income has not been declared for tax purposes, resulting in tax-related risks. Therefore, if a real estate enterprise rents out its unqualified houses, parking spaces and shops, it must not forget to file a tax declaration in accordance with the regulations on the rental income obtained.
Risk point 8: Directly cite the basis of VAT prepayment as the basis for LAT prepayment
The next risk point we focus on is "directly quoting the basis of VAT prepayment as the basis for LAT prepayment". In the process of risk review, tax personnel have found from time to time that some real estate enterprises directly cite the tax basis of VAT prepayment as the tax basis for LAT prepayment, resulting in the occurrence of underpayment of LAT in advance.
Remind everyone: for real estate development enterprises to sell self-developed real estate projects by way of advance payment, they can choose to prepay LAT in full according to the pre-collected accounts, or in accordance with the provisions of Announcement No. 70 of the State Administration of Taxation in 2016, according to the caliber of "LAT prepayment amount = (advance receipts - prepayment of VAT tax) pre-levy rate", and shall not directly refer to the prepayment of VAT.
Risk point 9: Repeated deduction of interest expenses leads to underpayment of LAT payments.
The ninth risk point allows us to focus on the risk of underpayment of LAT due to repeated deduction of interest expenses. For example, if the cost of obtaining land use rights for a project of a real estate enterprise is 50 million yuan, and the cost of real estate development is 30 million yuan, of which the interest expense in the "development cost - development overhead expenses" is 500,000 yuan, and the "financial expenses - interest expenses" are 200,000 yuan. At the time of liquidation, the enterprise did not adjust the interest expense included in the ordinary accounting of real estate development costs to the financial expenses for calculation and deduction, resulting in repeated deductions of interest expenses. Therefore, it is necessary to remind real estate development enterprises that the interest expense that has been included in the development cost should be adjusted to the financial expenses for calculation and deduction.
Risk point 10: Other reminders in the LAT liquidation process
The next risk point we pay attention to is the illegal deduction of the construction and installation costs of civil air defense parking spaces that cannot go through the registration procedures for the transfer of ownership in the LAT liquidation. For example, a real estate development company has won the right to use a piece of state-owned land, and there are villa buildings and high-rise buildings in the project, and there are underground parking spaces under the high-rise buildings. At the time of LAT liquidation, the enterprise apportioned and deducted the land cost of the underground civil air defense parking spaces, villas and high-rise buildings, resulting in tax-related risks. It is necessary to pay attention to the different regulations in different places: for example, in Guangdong Province, according to the announcement of the Guangdong Provincial Taxation Bureau of the State Administration of Taxation on the issuance of the Administrative Regulations for the Liquidation of Land Appreciation Tax of the Guangdong Provincial Taxation Bureau of the State Administration of Taxation, the non-deductible cost of the civil air defense parking space that cannot go through the registration procedures for the transfer of ownership shall be calculated in the construction and installation cost excluding the indoor (outdoor) decoration cost according to the proportion of the construction area.
Risk point 11: Failure to correctly allocate the cost of demolition compensation (resettlement) housing according to the development project
The eleventh risk point is that we focus on the failure to properly allocate the cost of demolition compensation (resettlement) housing according to the development project. Let me give you a typical case: a real estate development company acquires 100,000 square meters of land at one time, and plans to develop 20 commercial houses in five phases on the land, with a total construction area of 2 million square meters. The first phase of the development project covers an area of 10,000 square meters, with a total construction area of 200,000 square meters of commercial housing and 190,000 square meters of sales, of which 30 sets of commercial houses are used to compensate the demolished households, with a market value of 6 million yuan. When the company liquidates the LAT liquidation, all the demolition compensation paid in kind will be deducted from the first phase of the development project.
It is not difficult to find that if the land and demolition compensation costs jointly incurred by multiple development projects are not correctly allocated according to the development project, the project that developed first will underpay LAT and generate tax-related risks. Therefore, real estate companies should pay attention: there are multiple development projects, and they should be remembered to apportionment according to items. LAT is based on the development project as the liquidation unit, and the costs and expenses incurred by different liquidation units shall not be offset against each other, so the common costs incurred by multiple liquidation units shall be reasonably allocated or apportioned among the clearing units.
Risk point 12: The division of ordinary residential buildings in sub-phases at the time of liquidation is incorrect
For example, a real estate development company believes that the real estate project it develops is a residential residence for a group with a construction area of less than 144 square meters, so it simply identifies the project as an ordinary residence, resulting in the risk of inaccurate LAT calculation.
We need to know that the division of ordinary residential buildings cannot only be based on the condition of floor area, but must meet the three conditions of floor area ratio, sales ** and floor area at the same time. For example, in Guangdong Province, according to the Notice of the General Office of the People's of Guangdong Province and the Ministry of Construction on Doing a Good Job in Stabilizing Housing (Yuefuban [2005] No. 56), the standards for enjoying preferential policies for ordinary housing are:
The building volume ratio of the residential complex is 10 or more;
The floor area of a single house is less than 120 square meters or the floor area of a single house is less than 144 square meters;
The actual transaction ** is lower than 144 times less.
The above three conditions must be met at the same time before they can be classified as ordinary residences.
*: Light of Tax.
Author: Tax Light.