北京华伦律师事务所 - Business Tax Exemption Available for Returned Land Use Rights

Taxpayers who return land use rights to a landowner will be eligible for a business tax exemption if they can provide official documents relating to the withdrawal of land use rights by a local people’s government at or above the country level.

The aforementioned provisions were stipulated in the Circular on Issues Concerning Business Tax on the Return of Land Use Rights to Landowners by Land Users, released on April 16,2008 by China’s State Administration of Taxation (SAT). According to the Circular, regardless of whether the funds used to pay land expropriation compensation to the aforementioned taxpayers originates from government fiscal funds, any such activity must be regarded as the return of land use rights to landowners by land users.