| Real estate certification is a financial transaction process that converts low-mobility,non-certified real estate investment directly into securities assets on the capital market.Real Estate Investment Trusts(REITs)are an important means of realizing the securitization of real estate.They are a kind of funds that collect most investors through the issuance of income certificates,and are handed over to specialized investment institutions for real estate investment management.A comprehensive trust income,a type of trust fund that is allocated to investors on a pro-rata basis.Nowadays,REITs are welcoming huge market demand and development opportunities in China.From the experience of foreign development,tax incentives and tax-based financial innovation are the driving force for the development of REITs.However,in the process of introducing REITs,China does not have a matching tax system.According to the original tax law,there are problems such as excessive tax burden and double taxation.Therefore,this paper analyzes the tax burden of the three links of the whole life cycle of REITs: establishment,operation and exit,taking the Letai No.1 REITs as an example to demonstrate the various problems of China’s REITs tax policy.In terms of the establishment process,the cost of asset restructuring is too high.Excessive value-added tax,land value-added tax,and income tax will greatly increase the establishment cost,ultimately reduce investment income and reduce the sponsor’s willingness to finance.The more assets you add,the heavier the tax burden.The asset restructuring method adopted in this case is equity acquisition.According to the current law,only income tax,stamp duty,etc.should be levied,and no value-added tax is required.However,the equity acquisition was recognized as having the nature of real estate transactions in this case,and the value-added tax was imposed,resulting in a significant increase in the asset restructuring tax burden.If the national legislation is still not clearly defined in this aspect,it will inevitably greatly reduce the enthusiasm of real estate enterprises to raise funds through REITs.In terms of operations,the tax burden at the project company level accounts for a high proportion of operating income,which reduces the dividend yield and is less attractive to investors.Value-added tax,income tax,and property tax constitute the main tax during the operation period.If the project company’s assets are no longer depreciated,the income tax will increase and the total tax cost will increase further.If VAT is not included in the input tax deduction(such as the prevailingsimple collection),the amount of VAT paid will increase significantly.In terms of the exit link,since the current REITs are still operating in the market,it is expected that the exit period will be 2022.The future exit method is whether the asset repurchase or the public listing exit is not clear.At that time,the asset value cannot be estimated,and whether China will introduce publicly-recognized REITs.The relevant policies cannot be determined,so the calculation of this link is omitted.However,the tax burden of this link is similar to that of the establishment.The tax burden of asset restructuring,such as value-added tax,land value-added tax,and income tax,is involved.It can be judged by analogy that there is also a high tax burden.By analyzing the Letai No.1 REITs,it can be clearly found that Letai No.1 has various problems such as excessive asset restructuring tax,insufficient tax transparency,unclear tax collection status,and repeated taxation of operating links.In view of the problems of the taxation of the Letai No.1 REITs and the promotion of the further development of REITs in China,the author proposes to reduce the tax burden of asset restructuring,increase tax transparency,reduce the tax burden of REITs. |
