The Interim Measures for the Administration of Value-added Tax Levy on Taxpayers Providing Real Estate Business Leasing Services stipulates that small-scale taxpayers leasing out real estate shall calculate the tax payable in accordance with the 5% tax rate. General taxpayers meeting certain conditions use the simplified tax method and apply a tax rate of 5%, while others apply the general tax method and apply a tax rate of 11%.
Legal Objective:Article 3 of the Interim Measures for the Administration of Value-added Tax Levy on Taxpayers Providing Real Estate Business Leasing Services General taxpayers leasing out real estate shall pay value-added tax (VAT) in accordance with the following provisions: (1) General taxpayers leasing out real estate acquired before April 30, 2016 may choose to apply the simplified taxing method, and calculate the tax payable according to the tax rate of 5 percent. If the location of the immovable property and the location of the organization are not in the same county (city or district), the taxpayer shall pay the tax in advance to the competent tax authority of the location of the immovable property in accordance with the above taxing method and declare the tax to the competent tax authority of the location of the organization. If the location of the real estate and the location of the organization are in the same county (city or district), the taxpayer shall declare the tax to the competent tax authority of the location of the organization. (ii) General taxpayers leasing their real estate acquired after May 1, 2016 are subject to the general taxing method of tax calculation. If the location of the immovable property and the location of the organization are not in the same county (city or district), the taxpayer shall pay the tax in advance to the competent tax authority of the location of the immovable property in accordance with the advance tax rate of 3% and declare the tax to the competent tax authority of the location of the organization. If the location of the real property and the location of the organization are in the same county (city or district), the taxpayer shall declare tax to the competent tax authority of the location of the organization. General taxpayers leasing their real estate acquired before April 30, 2016 applying the general taxing method for tax calculation shall follow the above provisions. Article 4 of the Interim Measures for the Administration of Value-added Tax Collection on the Provision of Real Estate Business Rental Services by Taxpayers Small-scale taxpayers shall pay value-added tax for the rental of real estate in accordance with the following provisions: (1) Units and individual industrial and commercial households renting out their real estate (excluding housing rented out by individual industrial and commercial households) shall calculate the tax payable in accordance with the 5% levy rate. (a) Units and individual industrial and commercial households renting out real estate (excluding housing rented out by individual industrial and commercial households) shall calculate the tax payable according to the 5% levy rate minus 1.5%. If the location of the real estate and the location of the organization are not in the same county (city or district), the taxpayer shall pay the tax in advance to the competent tax authority of the location of the real estate in accordance with the above taxing method, and declare the tax to the competent tax authority of the location of the organization. If the location of the real estate and the location of the organization are in the same county (city or district), the taxpayer shall declare the tax to the competent tax authority of the location of the organization. (ii) Other individuals renting out real estate (excluding housing) shall calculate the tax payable in accordance with the 5% levy rate and declare tax to the competent tax authority where the real estate is located. Other individuals renting out housing, calculate the taxable amount in accordance with the 5% levy rate minus 1.5%, and declare tax to the competent tax authorities in the place where the real estate is located.