Research On Tax Priority In Real Estate Enforcement Cases

The "tax before certificate" system,as the name implies,is a condition that the tax is paid before the registration of real estate property.Specifically,in the process of real estate transaction,both parties should pay their respective taxes and fees,and then the competent tax authority will issue a tax clearance certificate,and the relevant real estate registration department will register the change of title of the real estate for the buyer based on the tax clearance certificate.The system of "tax before certificate",which is commonly found in real estate transactions in China,originated from the Provisional Regulations on Land Value Added Tax promulgated in 1993,and further extended the system of "tax before certificate" to the deed tax in 2005 by Document No.26 [2005] of the State Office.In October 2005,Document No.82 [2005] of the State Administration of Taxation was issued,in which it was clearly stipulated that the sales invoice of real estate was required to be provided in the declaration of deed tax.This law follows and even emphasizes the system of "tax before certificate".There is no doubt that "tax before certificate",as a key element for registering changes in real estate ownership,establishes a two-way binding system between buyers and sellers,effectively avoiding the problem of tax loss in real estate transactions in practice and enhancing the efficiency of tax collection.However,at the same time,it cannot be ignored that the "tax first and certificate later" has imposed too heavy a burden on the civil enforcement procedure.As the Supreme People’s Court has proposed the goal of "basically solving the difficulties in enforcement in two to three years",the people’s courts at all levels nationwide are taking advantage of the situation and moving forward to "effectively solve the difficulties in enforcement".The expanding tax controversies cannot be ignored while civil enforcement is efficiently promoted,and it is increasingly important to reflect on the operation of tax collection practice and re-examine the tax priority.The reason why tax priority can be expanded in civil enforcement is that when the executed property is not enough to settle all the debts,the tax with the nature of public welfare is given priority,while the creditors as the subjects of private law can only pay at their own risk.China’s current law on tax priority is mainly based on its public and risky nature,but in practice,the tax priority system must be updated and improved with the development of the times.In this context,this paper aims to provide practical suggestions for the improvement of the realization path of tax priority in real estate enforcement cases by analyzing and summarizing the current situation of the implementation of the "tax before certificate " system,so as to achieve a balance between tax collection and civil "enforcement difficulties".In addition to the introduction,the text consists of four parts.The first part is an overview of the "tax before certificate" system and the existing problems.Through sorting out the origins and development of the "tax before certificate" system and combining with specific judgments in judicial practice,we analyze three problems arising from the practical application of the system,namely,the scope of "tax first",the subject of "tax first" and the time issue of the obligation to pay tax on deed tax.The second part is to explore the root cause of the conflict of "tax before certificate" system.On the basis of the previous part,the fundamental reasons for the conflicts in practice of "tax before certificate" lie in two aspects.One is that there is a division in the change of real estate right,and there are certain differences between the tax authorities and the enforcement court in law enforcement concept and implementation level.Second,the system of "tax before certificate" in essence produces an absolute understanding of tax priority.Whether it is the requirement of "tax inclusion clause" or "advance deduction",it is the improper expansion of tax priority,resulting in the negative consequences of "tax before certificate" system in practice.The third part focuses on the view that "the priority of tax should be limited in real estate enforcement cases",and examines and reflects on the legal principle from the public welfare and risk of tax.Under the current background,it is worth considering whether the foundation on which tax priority exists is still solid.This paper does not deny the value of the existence of tax priority,but argues that in the case of conflicts between civil enforcement and tax collection,the boundary of tax priority should be appropriately limited.The fourth part is the ultimate goal of this article,which defines the boundaries and proposes specific operational guidelines for the realization of tax priority in real estate enforcement cases.First of all,tax priority should be limited in real estate enforcement cases,and tax authorities can only apply for participation in the distribution as tax creditors in the process of real estate enforcement,instead of participating in the distribution as tax collecting authorities.At the same time,this article refers to Articles 508-510 of the Civil Procedure Interpretation and proposes the substantive and procedural elements for the tax authorities to participate in the distribution,and only on the basis of meeting the two elements can the distribution be made.