Coordination Of The Deed Tax Legal System Of China

Intra-conflicts exist in the system of deed tax law in effect in China.On one hand,the time of establishment of deed tax obligation is stipulated by law as the day the contract for transfer of real estate right signed,but on the other hand,whether the deed tax already being paid can be refunded is depended on whether the transfer has been finished,which denies the logic of the rules aforesaid.The prosperity of Chinese real estate market and the popularization of house presale have witnessed a boom of administrative disputes in respect of fine and surcharge arising from delay payment of deed tax,to which the tax administrative review and litigation still cannot reply in stable and unanimous.The two key rules to coordinate the legal system of deed tax is the tax object and the payment period,which respectively are the key component of constitution of a tax obligation and the key procedure of tax obligation performance.The two key rules are connected tightly with each other,because the time when the object arises is exactly the time when the tax obligation is established,as well as the time when the payment period starts to calculate.The research of the two key rules is a work of legal interpretation through the inner and outside legal system the deed tax law.There are three parts in this essay.Part I consists of Chapter I,which shows the questions,analyses the background,prevails the essence of the question and decides the approach to be used in the research.Chapter I reflects the demands on the coordination of deed tax law system by listing out the rules in conflicts,underlying that the main reason of the existence of conflicts is lack of critical analysis in jurisprudence on the two key component and procedure aforesaid.Hence,based onthe research target,we choose legal interpretation as the main approach in consideration of its position and function.Part II consists of Chapter II and III,which performs as the main body of demonstration of the whole essay and each respectively focuses on legal interpretation of the object and the payment period.Through historical interpretation,Chapter II discovers that in history,deed tax has been playing the role of price of official authentication and legal protection of ownership on land and house,and from time to time being levied on the finish of transfer of real property right.Through systematic interpretation,from the perspective of relationship between civil law and tax law,the legal action of transfer of real property will never has its legal effect in tax law until the civil effect occurs.Since the Real Right Law adopts a pattern for transfer of real property ownership as of “contract + register”,it is the entity but not the sole act of contract is the object of deed tax.Therefore,this essay considers the civil legal effect of transfer of real property ownership as the object of deed tax.Through purposiveness interpretation,the real purpose of deed tax to levy a tax is to levy on the ability of bearing tax.Only when the real estate has completely been transferred into the title of the transferee can the law deems him as having such an ability of tax.Hence,from the three different dimension,the work of legal interpretation draws an unanimous conclusion as that the object of deed tax shall be the transfer out of real property right.In accordance with the logic chain of “object-time of tax obligation establishment-payment period”,the reasonable start point of payment period of deed tax should be postponed after the finish of register of real property transfer,which means the relative rule in effect stipulated by the Ordinance has been missed the jurisprudence.As a procedural tax rule,the rule of payment period should keep consistence with the principles of striking balance between the taxpayer and the tax authority,as well as the principle of tax collection efficiency.Chapter III investigates the difficulty the local tax authorities met in their practice and the negotiation between them and the taxpayers through collecting and analyzing the local deed tax collecting rules and their change history,finding out that the tax authorities and the taxpayers may get their consensus on setting the end point of deed tax payment period at the time of register.As for the later principle,introduction of a prepayment rule may help.Taking the whole picture of tax administration law into account,it turns to be easy for prepayment rule to find its instance.Prepayment shows its advantages among severalalternative arrangements as of ensuring the collection of deed tax while keeping in consistence with its jurisprudence logic at the same time,which is sufficiently reasonable to be selected as future option of Deed Tax Law.To be definite,prepayment of deed tax shall be paid after the signing of the contract for transfer of real estate,with a rate equal to the tax rate,while having a final liquidation after the register is done.Part III consists of Chapter IV,which shows the application and self-review of the conclusions drew by Part II,aiming to demonstrate the ability of the conclusions to get the coordination of the deed tax law system.Deed tax,with its objective component of transfer of real property right,constitutes economic double taxation with Land VAT and VAT.However,the tax base of Land VAT may not be adjusted simultaneously under the circumstance where the tax base of deed tax being adjusted by the tax authority by its discretion.Furthermore,there is no double taxation between deed tax and stamp duty,thus the tax base of stamp duty will never be affected by adjustment of deed tax.Applicable scope is the embodiment of tax object.In respect of specific circumstances,deed tax rules in effect make variety of confusions with tax exemption and out of applicable scope,as well as several leaks of applicable scope.When the payment period of deed tax being postponed after the finish of register,as advocated by this essay,the former rules with respect to tax refund will not apply.Chapter IV argues that after the tax obligation being established,deed tax may still be possible to be retrospectively invalidated.Hence,it is necessary for the future Deed Tax Law to provide a series of rules relating to tax refund criteria under the circumstances of contract's invalidity,revocation or termination,as well as the time point when refund responsibility arises.