d. The real estate company owes more than 10 million yuan in taxes, and the tax authorities have repeatedly urged the enterprise to pay the tax arrears. The investigation by the tax authorities found that the enterprise had transferred the real estate of the façade house under its name to the affiliated enterprise at an obviously unreasonable low price when the tax arrears ......had not been paidFaced with this situation, the Jingning She Autonomous County Taxation Bureau of the State Administration of Taxation (hereinafter referred to as the Jingning County Taxation Bureau) recently filed a lawsuit with the Jingning County People's Court, claiming to exercise the right of tax revocation and requesting the court to invalidate the real estate transfer transaction between Company D and a third-party enterprise in accordance with the law. After the trial, the court rendered a judgment in favor of the tax authorities' claim. At present, the Jingning County Taxation Bureau has taken compulsory enforcement measures to seize the real estate involved in the case of Company D in accordance with the law, and started the auction procedure, and the auction proceeds of the relevant real estate will be used to offset the tax arrears of the enterprise.
Enterprises do not pay tax arrears and transfer assets
Company D, a local enterprise engaged in real estate development, was operating well before, but due to poor business management, it began to have tax arrears. As of May 2022, the enterprise has owed more than 10 million yuan in taxes, and the tax officers have repeatedly urged them to no avail. In an interview with the tax authorities, the financial personnel of the enterprise said that most of the pre-sale income of the company's real estate development projects in the early stage had been transferred back to the parent company for group allocation, and the company was now in difficulty in capital flow, and its business activities had been stopped and it was unable to pay taxes.
The tax officer then conducted a targeted check on Company D's business operations, capital situation and asset status, and found that although Company D was still in a state of operation, it had very few funds in its bank account and no real estate or other assets in its name. During the inspection, the tax officer accidentally discovered that Company D had not only remitted all of the company's funds to its parent company, but had also sold 42 storefront houses to a company called Company Z at a low price a few months earlier.
If the enterprise does not pay the tax arrears, and the assets under its name have been transferred, is it really impossible to recover the tax arrears?
The legal system, collection and management departments of the Jingning County Taxation Bureau conducted special discussions on how to recover tax arrears, and clarified the path and method of recovering tax arrears in the next step. In their opinion, Article 50 of the Tax Administration Law clearly stipulates that: "If a taxpayer who owes tax owes tax is aware of the situation and causes damage to the state tax revenue due to negligence in exercising the due creditor's rights, or waives the due creditor's rights, or transfers the property without compensation, or transfers the property at an obviously unreasonably low price, the tax authorities may exercise the right of subrogation and the right of revocation in accordance with the provisions of Articles 73 and 74 of the Contract Law." "Company D owes tax and does not pay it, and there is an act of selling real estate at a low price, it can recover the tax arrears by exercising the right of tax revocation.
Exercising the right of revocation to recover tax arrears
In order to ensure that the right of tax revocation can be successfully exercised, the Jingning County Taxation Bureau conducts a targeted investigation. Combined with the provisions of the regulations, firstly, the two facts of whether the sale of real estate by Company D to Company Z was an "obviously unreasonable low price" and whether the transferee Company Z knew about the situation were investigated and collected.
Through investigation, the tax officer confirmed that the average unit price of the 46 storefront properties given by Company D to Company Z was 2,792 yuan square meters, while the average unit price of 18 storefront houses given to other customers was 6,728 yuan square meters. At the same time, it was also found that shortly after Company Z purchased the property, it sold 4 storefronts to Company J, with an average unit price of 5,783 yuan per square meter. These circumstances fully show that the sale of real estate by Company D to Company Z was "obviously unreasonably low" and that "the transferee, Company Z, knew about the situation". In order to reflect the fairness of the survey results, the Jingning County Taxation Bureau selected three storefronts in the same area and entrusted a third-party agency to evaluate their market value for the same period. The assessment results further confirmed that the sale of property by Company D to Company Z was an "obviously unreasonably low price".
In addition, the Jingning County Taxation Bureau also conducted a follow-up investigation on the situation of Company D and Company Z. In the course of the verification, the tax officer found the public financial report of Company Q, a listed company in Hong Kong, the actual controller of Company D, and found that Company Q and Company Z were in an "associate" relationship, which indicated that Company D and Company Z were related. In addition, the results of the verification of the company's capital flow showed that after Company D sold the façade property to Company Z, Company Z did not remit the purchase money to Company D, but remitted the relevant money to the affiliated enterprises of Company Q, the parent of Company D.
The evidence obtained from the investigation further strengthened the determination of the Jingning County Taxation Bureau to exercise the right of tax revocation. Subsequently, the Jingning County Taxation Bureau filed a civil lawsuit with the Jingning County People's Court, claiming to revoke the real estate transfer transaction between Company D and Company Z for the transfer of 42 storefronts, handle the cancellation of the registration of the real estate ownership certificate, and bear the litigation costs and necessary expenses for exercising the right of revocation by Company D.
Since the tax authorities adduced sufficient evidence and reasonable claims, the Jingning County People's Court, after hearing the case, made a judgment in favor of the claims of the tax authorities: revoking the "Commercial Housing Sales Contract" signed by the defendant Company D and Company Z for 42 storefronts; Within 30 days from the effective date of the judgment, Company Z registered the transfer of the property rights of the above-mentioned store back to the name of Defendant Company D; Within 30 days from the effective date of the judgment, the defendant D company shall pay the relevant litigation fees and all property preservation guarantee fees of the Jingning County Taxation Bureau.
After receiving the court's judgment, Company D and Company Z did not object. At present, the Jingning County Taxation Bureau has launched a compulsory enforcement procedure in accordance with the law to seize the façade real estate under the name of Company D, and an auction will be held in the future, and the auction proceeds will be used to offset the tax arrears of the enterprise.
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