Is a parking space a fixed asset or an intangible asset? Is a house without a real estate certificate a fixed asset? Come and see the answer from the tax bureau!
1
Is a parking space a fixed asset or an intangible asset?
The IRD replied:
"According to the "Decree No. 512 of the State Council of the People's Republic of China":
Article 57 The term "fixed assets" as mentioned in Article 11 of the Enterprise Income Tax Law refers to the non-monetary assets held by enterprises for the purpose of producing products, providing labor services, leasing or operation and management, and having been used for more than 12 months, including houses, buildings, machines, machinery, means of transportation and other equipment, appliances and tools related to production and business activities.
Article 65 The term "intangible assets" as mentioned in Article 12 of the Enterprise Income Tax Law refers to non-monetary long-term assets held by enterprises for the purpose of producing products, providing labor services, leasing or business management, including patent rights, trademark rights, copyrights, land use rights, non-patented technologies, goodwill, etc. ”
To summarize it for you:
1. The purchase price of the purchased parking spaces is usually difficult to reasonably allocate the land use rights and buildings, so all of them should be regarded as fixed assets.
2. If the purpose of purchasing a parking space is to earn rent or capital appreciation, it should be converted into "investment real estate", or directly recognized as "investment real estate" at the time of purchase.
3. If it is obtained through a lease and sale agreement, such as a lease term of 20 years, it will not affect the above-mentioned accounting treatment in accordance with the principle of "substance over form". If it is necessary to treat it as a lease, the accounting can be included in the "right-of-use asset".
Finally, it should be noted that the existence of a certificate of property rights does not affect the recognition of assets in accounting, because the basic accounting standards and fixed assets standards all focus on requiring "ownership or control that is expected to bring economic benefits to the enterprise".
2
If it is a non-titled parking space
What are the relevant tax issues?
1. What taxes should be paid for renting out (permanent rental) parking spaces without property rights?
2. Is stamp duty paid for the transfer of non-property right parking spaces?
It does not fall within the scope of stamp duty and does not need to be paid.
3. Do I need to pay real estate tax when purchasing a parking space without property rights?
If the contract is a long-term lease of the right to use the parking space, then the property tax is paid by the lessor, and the lessee does not pay the property tax.
3
Homes without title deeds
Is it a "fixed asset"?
The recognition of assets focuses on "ownership or control", with the possibility of future inflows of economic benefits;
The presence or absence of the real estate certificate does not affect the recognition of the house as a fixed asset. If a house without a real estate certificate meets the prescribed conditions, it can be recognized not only as a fixed asset in accounting, but also as a fixed asset in terms of taxation, and then it can also be provided for depreciation and pre-tax deduction.
Policy basis:
1. Accounting Standards for Business Enterprises No. 4 - Fixed Assets have the following provisions on the recognition of fixed assets:
Article 3 Fixed assets refer to tangible assets with the following characteristics at the same time:
(1) Held for the purpose of producing commodities, providing labor services, leasing or business management;
(2) The service life is more than one fiscal year.
Service life refers to the expected period during which an enterprise will use a fixed asset, or the quantity of products or services that the fixed asset can produce
Article 4 Fixed assets can only be recognized if they meet the following conditions at the same time:
(1) The economic benefits related to the fixed assets are likely to flow into the enterprise;
(2) The cost of the fixed asset can be reliably measured.
2. In accordance with the "Accounting Standards for Business Enterprises - Basic Standards (2014)" on asset recognition, the provisions are as follows:
Article 20 Assets refer to the resources formed by past transactions or events of an enterprise, owned or controlled by the enterprise, and expected to bring economic benefits to the enterprise.
The past transactions or events of the enterprise referred to in the preceding paragraph include purchase, production, construction or other transactions or events. Transactions or events that are expected to occur in the future do not result in assets.
Owned or controlled by an enterprise means that the enterprise enjoys the ownership of a certain resource, or although it does not enjoy the ownership of a certain resource, the resource can be controlled by the enterprise.
The expected economic benefits to the enterprise refer to the potential to directly or indirectly lead to the flow of cash and cash equivalents into the enterprise.
4
Collection!
A full summary of the taxes and fees involved in renting and buying houses!
1. Housing sales (including sales, gifts, and inheritance)
1. Housing sales
Note (1): The policy of halving the additional tax for small-scale taxpayers is until December 31, 2024.
Note (2): "Full five only" refers to the only living house for self-use for more than 5 years and for the family.
Attached: Deed tax rate table
2. Housing gift
Note (1): If there is no transfer price, it shall be verified by the tax authorities.
3. House inheritance
2. Housing for rent
Source: Mei Song talks about taxation. The content of this article is for general information purposes only and is not intended as formal auditor, accounting, tax or other advice, and we cannot guarantee that such information will remain accurate in the future. No person should act on the basis of the information contained herein without having due regard to the relevant circumstances and obtaining appropriate professional advice. The articles reproduced in this issue are for academic exchange purposes only. The original copyright of the article or material belongs to the original author or original copyright owner, and we respect copyright protection. If you have any questions, please contact us, thank you!