China Tax & Investment News | China to speed up the progress towards law-based taxation – The draft Land Appreciation Tax Law was released for public comments

China Tax & Investment News (CTIN) is a bilingual thought leadership prepared by EY’s China Tax Center team and distributed in PDF to all EY clients which have subscribed to EY email notifications. Different from China Tax & Investment Express (CTIE), which is a weekly quick briefing on multiple rules/regulations/polices officially issued in that period, CTIN – normally focusing on one ruling or one type of issues/industries each issue - provides more detailed interpretation and in-depth business implication analysis on significant policies as well as trends of development in tax and business related areas.

With the implementation of China’s 13th Five-Year Plans which propose to fully promote the principle of “Legalization of Taxation”（税收法定原则）by 2020, the Chinese government has made considerable progress on tax legislation in recent years. Currently, China levies a wide range of taxes including 18 types of taxes, eight of which are levied based on tax laws.

After the Two Sessions in 2019, the Ministry of Finance (MOF) issued the 2019 Legislative Work Plan, which mentioned that the MOF will strive to complete the drafting of laws for certain taxes (including Value-added Tax, Consumption Tax, Stamp Duties, City Construction and Maintenance Tax, Land Appreciation Tax (LAT), Custom Duties, etc.) within 2019, and will be submitted to the State Council for first deliberation in a timely manner. In response, the MOF and State Taxation Administration (STA) recently jointly released the “LAT Law of the PRC (Discussion Draft)” (the “Discussion Draft”) for public consultation which will be closed on 15 August 2019.

This news alert is to provide you with insights by comparing the Discussion Draft with the prevailing LAT Regulations as well as relevant provisions, discussing the major changes and sharing our observations with you.

For more information, please contact your usual EY contact or one of the EY’s China tax leaders in the list attached at the end of this tax alert.