Thursday 23 November 2017

China’s state TV says property developers owe more than US$623 billion in back taxes

In its Weekly Quality Report on Sunday, CCTV reported that 45 of China’s biggest property developers owe a total of more than 3.8 trillion yuan ($623 billion) in land appreciation taxes from 2005 to 2012.

China’s state TV says property developers owe more than US$623 billion in back taxes

China's flag against the backdrop of a new residential development in Beijing. Courtesy: Reuters

November 26, 2013

The report cited lawyer Li Jinsong as the source. Li, of the Beijing Yitong Law Firm, has previously raised similar allegations but has never before been given such a high-profile platform in China's state-run media.

Well-known companies like SOHO China Ltd. and China Vanke Co., Ltd. were named. Guangzhou-based Agile Property Holdings Limited was said to owe the highest tax debt at 8.3 billion yuan.

Many of the businesses mentioned in the report quickly denied the allegation and Vanke, the biggest Chinese developer listed on mainland exchanges, said the report is based on a “misunderstanding”. The company said it paid 21.1 billion yuan in taxes in 2012, of which 5.28 billion was land appreciation tax.

High property prices are a major source of discontent among citizens, and authorities have sought to control their rise while at the same time pledging to provide low-cost housing.

Chinese home prices jumped 10.69 percent year-on-year to 10,685 yuan per square metre in October, according to an independent survey by the China Index Academy.

One real estate mogul, Ren Zhiqiang, who runs Huayuan Property Co. Ltd and who is one of China’s most widely recognized online personalities with nearly 16 million followers on Sina Weibo, China’s Twitter-like microblogging site, was so outraged by the allegation that he's considering suing CCTV over allegations that his company owes unpaid taxes.

CCTV has broadcast similar exposés targeting prominent foreign firms like Apple, Starbucks and Volkswagen AG in recent months.

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