The Scheme Of Tax Planning About LD Company’s Real Estate Enterprises

With the continuous development of China’s real estate industry in recent years, rivalry among the real estate enterprises has been growing rapidly; and the state regulation over real estate industry is also becoming more rigorous. For real estate enterprises, it’s getting more difficult to reduce operating cost through only strengthening internal management, specially since May 1,2016 the full implementation of China’s "replacing business tax with value-added tax(VAT), clear construction industry value-added tax rate to 11%.Hence, operating cost reduction through external-linked solutions became more critical than ever, which makes tax planning an attractive measure to these enterprises.This research combined both theory and real case studies. Firstly, through analyzing the characteristics and development trend of China’s real estate industry, the research sorted out existing tax policies which are relevant for real estate development enterprises. Furthermore, based on analysis of the business operation process in real estate development enterprises, this study believes that the real estate enterprises should carry out tax planning measures in eight critical segments:enterprise start up, land acquisition, development planning, equity transfer, investment financing, development and construction, product sales, and holding business operation. By identifying tax planning opportunities in each of these eight sectors, the enterprises can expect to generate more profit. Last but not least, this research selected a case study of a representative real estate development project, and further proved the positive impact of proper tax planning on the operating profit of the enterprise-through locating the relevant segments, selecting representative tax planning areas, applying tax planning skills and measures, and elaborating specific tax planning methods.Tax planning is a rationale behavior for the tax payers to safeguard their own interests; it is a tool for enterprises to maintain legitimate profits by utilizing tax policies comprehensively. Tax planning is not limited to the most focused taxable segment, it can be widely applied in different business operating processes throughout the development of an enterprise. By using proper techniques and measures, enterprises can achieve the goal of reduced the tax burden, and better resilience against potential business risk and financial risk.