Atypical Transfer Of Land-Use Right

In our system of public land ownership, land-use rights which can be transfered has become the premise of the existing of urban real estate market. China's real estate laws and regulations have made specific provisions on the transfer of land-use right. In the restricted conditions of transfer, "Urban Real Estate Management Law", "Land Management Law" and others have made provisions on real estate companies (this article refers only to having the project under construction) transfering land-use rights and the project,and,in a word,companies must meet the three mandatory conditions, otherwise, shall not be transferable; while, other civil and commercial matters, including natural persons, other companies (this means companies not real estate development for business and real estate companies that have no project under construction), other legal persons, unincorporated organization, transfer their land-use right without restrictions, but only in the tax,they and real estate companies are also required to pay land value increment tax.China's"Land Value Increment Tax Provisional Regulations"levied land value increment tax on units and individuals who transfer state-owned land-use rights,buildings and fixtures on the ground and obtain income.However,in practice,real estate companies and other companies who need to transfer their land-use rights don't use the way that directly transfer it in the secondary market,but frequently adop the way of equity transfer. Some economists and practitioners believe that the behavior"share transfer in form in order to achieve the land-use right transfer"is the company's selection made after comparative analysising of the tax burden "permitted by law" and tax planning for the company, and companies'equity transactions do not conduct improperly,it is consistent with the relevant provisions of company law and tax law;in the same time,shareholders'equity transfer has not led the subjects of land-use right change,so it isn't behavior of land-use right transfer,and has no need to be compliance with national land administration laws and regulations,no need to pay land value increment tax.These evaluations only see the phenomenon that"share transfer in form,land-use right transfer indeed"on the surface,no real in-depth research.Up to this writing, the phenomena has't been paid attention to by the legal circles,so relatively few references. After analyzing the causes of this phenomenon,dismembering specific types of shares transfer for realization of land-use right transfer,and discussing the similarities and differences between the transfer of assets and transfer of shares,this paper makes legal evaluation on the the phenomenon and puts forward countermeasures.This article constitutes the introduction and three chapters.The introduction describes the main purpose of the study,theoretical significance, practical value,the research status of related fields at home and abroad,research methods,as well as other related issues should be explained.Chapter I presents questions why so prevalent the companies adopt a"shell"approach behavior to transfer of land-use rights,and whether it is legal,and analysises the causes of these questions in three areas that a businessman seeking to maximize economic efficiency,legislative restrictions of land-use right transfer and related uncoordinated legislative loopholes.Chapter II dismembers specific types of shares transfer of company's shareholders to realize the transfer of land-use right, discusses the differences and connections of the transfer of shares and assets, then,comes to the conclusion that shareholders equity transfer can achieve essentially the same effect with land-use right transfer,after a better understanding of China's legislation and the legislative intent on the transfer of land-use rights,to understand what is typical land-use right transfer.The part of this paper gives the legal assessment about the phenomenon of"shares transfer in form,land-use right transfer in deed",that this is a matter of legal avoidance behavior with a serious harmful to society.Chapter III is study of countermeasures that govern the phenomenon "shares transfer in form, land-use right transfer in deed". This paper argues that to address this phenomenon, the key is to establish a recognized standard to determine the character of the act, should to pay attention to the subjects changing of actual controlling of the land and accessing to land's benefit.Shares transfer which has been identified as essentially transfer of land-use rights is to real estate laws and regulations;stock transfer which has been identified as the normal behavior is applicable to corporate law.A new tax should be levied on the transferor of shares whose amount is to value increment tax,and land-use right priced acting as shares should be limited by law,and also should enhance administrative control.