The Ministry of Finance issued an additional notice on reinsurance, real estate rent and training policies during the trial period of replacing the business tax with value-added tax on June 21. The notice clarified that the general taxpayers of the real estate development enterprises letting out independently developed old real estate projects can choose the simple applicable taxation method and be taxed at 5%. The small-scale taxpayers of the real estate development enterprises letting out independently developed projects will be taxed at 5%.

 

Moreover, domestic insurance companies will be exempted from the value-added tax for providing reinsurance services for complete overseas consumption. The pilot taxpayers providing reinsurance services (excluding the reinsurance services provided by domestic insurance companies to overseas insurance companies) are subject to the same value-added tax policy with the original insurance services. As for the case that reinsurance contracts correspond to multiple original insurance contracts, reinsurance contracts are also eligible for the exemption of value-added tax when the original insurance contracts are eligible for the exemption of value-added tax. Otherwise, the reinsurance contracts should be taxed the value-added tax in line with the related provisions.

 

Source: Translated from Invest Guangzhou, June 22, 2016