How to pay taxes when establishing a wholly-owned subsidiary with land investment?

1. Establish a wholly-owned subsidiary directly with the cost of land and pre-construction projects; 2. First, invest in cash to establish a wholly-owned subsidiary (the wholly-owned subsidiary is only engaged in non-real estate development business such as hotels), and then use the land and construction costs to increase the capital of the wholly-owned subsidiary. A: About the tax-related issues of investing in shares in projects under construction. 1. The Notice of the Ministry of Finance and State Taxation Administration of The People's Republic of China on Business Tax on Equity Transfer (Caishui [22] No.191) stipulates that if intangible assets or real estate are invested in shares, participating in the profit distribution of the investors and sharing the investment risks, business tax will not be levied. 2. The Notice of the Ministry of Finance and State Taxation Administration of The People's Republic of China on Some Specific Issues Concerning Land Value-added Tax (Caishuizi [1995] No.48) stipulates that the land value-added tax shall be temporarily exempted for those who invest or join the joint venture with real estate, and when one party of the investment or joint venture invests with land (real estate) as a share at a fixed price or transfers the real estate to the invested or joint venture enterprise. Land value-added tax shall be levied on the re-transfer of the above-mentioned real estate by investment and joint ventures. The Notice of the Ministry of Finance and State Taxation Administration of The People's Republic of China on Some Issues Concerning Land Value-added Tax (Caishui [26] No.21) stipulates that the Notice of the Ministry of Finance and State Taxation Administration of The People's Republic of China on Some Specific Issues Concerning Land Value-added Tax (Caishui Zi [1996]) shall not apply to any investment or joint venture with land (real estate) as a share, any enterprise invested or joint venture engaged in real estate development, or any real estate development enterprise invested and joint venture with commercial housing built by it. 3. Article 25 of the Regulations for the Implementation of the Enterprise Income Tax Law stipulates that if an enterprise exchanges non-monetary assets and uses goods, property and services for donation, debt repayment, sponsorship, fund-raising, advertising, samples, employee welfare or profit distribution, it shall be regarded as selling goods, transferring property or providing services, except as otherwise provided by the financial and tax authorities of the State Council. 4. The Notice of State Taxation Administration of The People's Republic of China on the Interpretation and Provisions on Certain Specific Issues of Stamp Duty (Guo Shui Fa [1991] No.155) stipulates that the taxation scope of the documents of property ownership transfer is: the documents of ownership transfer of movable property and real estate registered by the government management organ, and the documents of enterprise equity transfer. According to the above regulations, the hotel invests in shares with land and upfront project funds, participates in the profit distribution of the investors, and bears the investment risks together, so business tax is not levied. Provisions on temporary exemption from land value-added tax for enterprises that invest in real estate development. However, enterprise income tax and stamp duty should be paid. On the tax-related issues of capital investment in shares. Article 1 of State Taxation Administration of The People's Republic of China's Notice on Stamp Duty on Capital Account Books (Guo Shui Fa [1994] No.25) stipulates that after the production and business operation entities implement two items, the tax basis of stamp duty on the account books in which funds are recorded is changed to the total amount of paid-in capital and capital reserve. Article 2 stipulates that if the total amount of paid-in capital and capital reserve of an enterprise after the implementation of the two new account books is greater than the original decal funds, part of the increased subsidies will be stamped. According to the above regulations, the establishment of a subsidiary by the hotel with capital investment is consistent with the capital increase of the company and the tax-related matters. Business tax and land value-added tax are not paid, but stamp duty should be paid.