Recently, SOHO China released its 2023 interim results announcement, disclosing that: as of the date of the announcement, its subsidiary, Beijing Wangjing Sohou Real Estate Company Limited, owed nearly $2 billion in land value-added tax (LVAT) and late fees, and may be at risk of fines and tax enforcement. For large real estate development enterprises, land value-added tax often occupies a very high proportion of the overall tax burden, is a tax cost that cannot be ignored, if not well in advance of the tax planning, resulting in unpaid land value-added tax, will face serious tax risks. This paper intends to analyze the tax-related risks and countermeasures of real estate development enterprises defaulting on land value-added tax in the context of SOHO China's tax arrears, and put forward suggestions to the majority of taxpayers to resolve tax arrears risks.

Land value-added tax (LVAT) settlement by housing enterprises requires the collection and allocation of costs and expenses according to certain settlement units or different real estate types. As the tax burden calculated under different apportionment methods may differ significantly, but in the absence of clear conditions and order of application of the cost apportionment methods at the national level, tax policies are scattered and different in different regions, which leads to confusion in understanding the relevant policies and tax-related operations of enterprises. This article is intended to analyze the dispute between tax enterprises on the application of cost-sharing methods in the context of a case.

In land value-added tax (LVAT) settlement, how costs are pooled and deducted has a bearing on the determination of value-added amount, which directly affects the level of tax liability of taxpayers. Cost deduction is divided into two methods: direct deduction and apportionment deduction, and apportionment deduction includes the method of land area, building area and other methods. What is the relationship between these deduction methods and the principle of benefit? Should the principle of benefit be taken into consideration when choosing deduction methods? On the basis of sorting out the relevant policies on cost pooling deduction methods, this article is going to analyze the application of the benefit principle in land value-added tax settlement, and accordingly explain the necessity of selecting cost pooling deduction methods according to the benefit principle.