The Ministry of Finance issued an interpretive ruling on August 28, 2026, clarifying the treatment of transaction losses for profit-seeking enterprises disposing of multiple properties subject to Land Value Increment Tax (LVIT) under separate calculation but combined filing. According to the ruling, losses from such transactions must first be offset against gains from other property transactions within the same tax year that are subject to the identical LVIT rate tier, before any carryforward or other deductions.
Key Takeaways
- Strict Matching Principle: Losses can only offset gains taxed at the exact same LVIT rate bracket, preventing cross-rate arbitrage and ensuring progressive tax integrity.
- Annual Limitation: The offset is confined to the current tax year; unused losses cannot be carried forward to future years or applied against ordinary business income.
- Compliance Impact: Enterprises with diversified real estate portfolios must track each property’s applicable LVIT rate tier meticulously to optimize tax planning and filing accuracy.
Disclaimer: This article is compiled and summarized by the AI based on publicly available information and is for general information purposes only. It does not constitute any form of formal tax advice, legal opinion, or basis for performance. Please consult a qualified professional tax advisor or legal counsel for tax advice.
Source: Read Official Announcement