Property Transfer
In a property transfer, the taxes paid by a seller of real estate are as follows:
- Income Tax:
- Onshore entity seller: 25% of the net profit
- Offshore entity seller: 10% of the net gain
- VAT: 9% of the gross sales proceeds which will be passed through to the purchaser to pay. If the real estate properties were acquired by the seller before 30 April 2016, the seller may opt for a simplified tax method, ie apply a reduced VAT rate of 5% on the gross sales proceeds which will be borne by the seller itself
- Land Value Appreciation Tax (LVAT): Progressive scale ranging from 30% to 60% depending on the amount of taxable gains derived from the transfer of real property, and
- Stamp Duty: 0.05% of the purchase price
Individual sellers may be exempted from paying income tax, VAT, stamp duty and LVAT provided that required conditions have been satisfied.
Share Transfer
In a share transfer, the taxes paid by a seller of a real estate company are as follows:
- Income Tax:
- Onshore entity seller: 25% of the net profit
- Offshore entity seller: 10% of the net gain, and
- Stamp Duty: 0.05% of the Equity Transfer Price
