Li ×× is the owner of Taihu Hotel, which is located in Taihu Village, the seat of Taihu Town Government. On April 20, 2015, after declaration, Li ×× paid 420 yuan in property tax to Majuqiao Tax Office. On May 22 of the same year, Li ×× filed an administrative review with Tongzhou Local Taxation Bureau, requesting the revocation of the administrative act of Majuqiao Tax Office levying 420 yuan of property tax on him and requesting state compensation. On July 20, Tongzhou Local Taxation Bureau made the appealed review decision, upholding the act of Majuqiao Tax Office levying property tax on Li ×× and rejecting Li ××'s request for compensation. Li ×× then filed an administrative lawsuit with the court. After trial, the court of first instance did not support Li ××'s claim that the premises used by his Taihu Hotel belonged to rural self-owned houses and were not within the scope of property tax, and ruled to reject Li ××'s claim.

Li ×× refused to accept the first instance judgment and appealed, arguing that he used his own house in Taihu Village to open Taihu Hotel, as evidenced by his "ID Card", "Tax Registration Certificate", "Individual Business Household Business License", and "Certificate issued by Taihu Village Committee". Both the house used by Taihu Hotel and the legal person of the hotel belong to Taihu Village, which is rural and belongs to farmers. The appellant's collection of property tax from Taihu Hotel violates Article 1 of the "Provisional Regulations on Property Tax": Property tax is levied in cities, county towns, established towns and industrial and mining areas, and (II) of the "Interpretation and Provisional Regulations on Several Specific Issues of Property Tax" of the Ministry of Finance and the State Administration of Taxation: The scope of taxation in cities is the urban area, suburbs and county towns under the jurisdiction of the city, excluding rural areas, and the scope of taxation in established towns is the location of the town people's government, excluding the administrative villages under its jurisdiction. The appellees, Majuqiao Tax Office and Tongzhou Local Taxation Bureau, both agreed with the first instance judgment.

The court of second instance held that the focus of the review in this case is whether it is legal for Majuqiao Tax Office to levy 420 yuan of property tax on Li ××. According to relevant laws and regulations, the scope of property tax collection in established towns is the location of the town people's government, and property tax is paid by the property owner. In this case, Taihu Hotel is located in Taihu Village, the seat of Taihu Town Government, and Taihu Hotel should be within the scope of property tax collection. Li ××, the owner of Taihu Hotel, is the taxpayer of property tax, so the appealed tax levy act made by Majuqiao Tax Office is not inappropriate.

1. The dispute over the scope of property tax collection has a long history.

 In 1986 and 1988, the "Provisional Regulations of the People's Republic of China on Property Tax" and the "Provisional Regulations of the People's Republic of China on Urban Land Use Tax" were promulgated and implemented successively. Since the property tax and urban land use tax have not yet been legislated, the above two tax administrative regulations are currently the most effective basis for taxation, and both have used "levying in cities, county towns, established towns and industrial and mining areas" as the scope of taxation to this day.

 Although the two tax administrative regulations on property tax and urban land use tax stipulate the same scope of taxation, the supporting tax normative documents have inconsistencies in the content involving rural land. In terms of property tax, the "Interpretation and Provisional Regulations on Several Specific Issues of Property Tax" ([1986] Cai Shui Di Zi No. 008) of the Ministry of Finance and the State Administration of Taxation clearly states: A city refers to a city established with the approval of the State Council, and the scope of taxation is the urban area, suburbs and county towns under the jurisdiction of the city, excluding rural areas; a county town refers to the location of the county people's government that has not established an established town; an established town refers to an established town established with the approval of the people's government of the province, autonomous region, or municipality directly under the Central Government, and the scope of taxation is the location of the town people's government, excluding the administrative villages under its jurisdiction. In terms of urban land use tax, the "Interpretation and Provisional Regulations on Several Specific Issues of Land Use Tax" ([1988] Guo Shui Di Zi No. 015) of the State Administration of Taxation clearly states: Land within the scope of cities, county towns, established towns, and industrial and mining areas refers to land owned by the state and collectively owned within these areas.

 The property tax document states "excluding rural areas", while the urban land use tax document clearly includes collectively owned land within the scope of collection, which leads to ambiguity in whether rural properties are within the scope of property tax collection. For example, commercial houses on land in urban villages occupy rural collectively owned land and also belong to the village committee in terms of administrative division. According to the urban land use tax document, as long as the location is in a city, even if it belongs to rural collectively owned land, tax should be levied, while according to the property tax document, it can be understood that this area belongs to rural areas and does not need to be taxed.

 In 1999, the State Administration of Taxation mentioned in the "Notice on Adjusting the Interpretation Regulations on the Specific Scope of Property Tax and Land Use Tax" (Guo Shui Fa [1999] No. 44): Some regions have reported that the interpretations of the specific scope of property tax and land use tax are not entirely consistent, and economic development and urban construction have undergone great changes, which is not convenient for operation in actual implementation. To this end, the notice further clarified: Regarding the specific scope of taxation in established towns, the local taxation bureaus of each province, autonomous region, and municipality directly under the Central Government shall propose a plan, which shall be implemented after being determined and approved by the people's government of the province, autonomous region, or municipality directly under the Central Government, and reported to the State Administration of Taxation for record. In 2000, the State Administration of Taxation mentioned in the "Reply on the Issue of the Scope of Property Tax Collection in Beijing" (Guo Shui Han [2000] No. 1003): The specific scope of property tax collection in your city shall be determined by your bureau according to the regulations and your city's administrative division. The scope of property tax collection should be consistent with the scope of land use tax collection.

 Both of the above tax documents clarify that the scope of property tax is a concept of regional planning. In particular, the State Administration of Taxation's approval of the Beijing Municipal Local Taxation Bureau emphasized that the scope of property and land taxes is consistent, thereby bridging the differences caused by the inconsistent supporting interpretations of the two taxes. However, these two documents are only internal documents of the tax authorities. According to the "Measures for the Formulation and Management of Tax Regulatory Documents" (Order No. 41 of the State Administration of Taxation in 2017): Tax regulatory documents refer to documents that affect the rights and obligations of tax administrative counterparts, have universal binding force and are repeatedly applied within their jurisdiction, and shall not be referred to as "Regulations", "Implementation Rules", "Notices", "Approvals", etc. The "National Tax Authority Document Processing Measures" (Guo Shui Fa [2012] No. 92) stipulates that notices are applicable to the issuance and communication of matters requiring lower-level authorities to implement and relevant units to be aware of or implement; approvals are applicable to answering requests from lower-level authorities; tax authorities shall publicly issue tax regulatory documents and other important tax matters to domestic and foreign countries in the form of announcements. These two documents are notices and approvals, respectively. Although they are public tax documents, strictly speaking, they are not even tax regulatory documents, and their influence on tax administrative counterparts is minimal. This makes it easy to understand why some people still misunderstand the 1986 "Interpretation and Provisional Regulations on Certain Specific Issues Concerning Property Tax" that the scope of taxation "does not include rural areas."

 Both the "Provisional Regulations on Property Tax" and the "Provisional Regulations on Urban Land Use Tax" stipulate that cities, county towns, established towns, and industrial and mining areas are the scope of taxation. Although there are concepts of urban and rural planning such as cities and county towns, there are also concepts of administrative divisions such as established towns. However, considering that urban and rural planning had not yet been legislated when the two property and land tax regulations were formulated, the "Urban and Rural Planning Law of the People's Republic of China" was only formulated and implemented about twenty years later in 2007. The inconsistency in these concepts at that time did not affect the understanding of the scope of taxation. Moreover, a series of subsequent tax regulatory documents and internal documents of the tax authorities have successively clarified that the scope of property and land tax collection is consistent, and it is divided by region rather than by nature.

 According to the principle established by the "Legislation Law", the tax law can stipulate in which area and how to levy taxes, but how this area is divided, including what is included and what is not, should be determined by other laws or subjects authorized by law. At present, the division of specific urban and rural areas in our country comes from the urban and rural plans compiled by the people's governments at all levels authorized by the "Urban and Rural Planning Law of the People's Republic of China". This law stipulates that the compilation and implementation of urban and rural plans must perform strict and scientific legal procedures, which not only reflects the authority and seriousness of the plan, but also requires the urban and rural planning organization and compilation agency to promptly announce the urban and rural plans approved according to law, with a clear "spatial layout" and clear geographical boundaries, so that taxpayers have a clear decision-making basis in terms of property tax when planning the location of production and business activities, and eliminate disputes between the tax collector and the taxpayer due to whether it belongs to the scope of property tax.

 In summary, property tax is clearly levied in cities, county towns, established towns, and industrial and mining areas. Here, it is expressed as a geographical space concept rather than a land nature concept. Regardless of whether it is state-owned land or collective land, even if it administratively belongs to a village collective organization, as long as it is located within the boundaries of cities, county towns, established towns, and industrial and mining areas recognized by the legally formulated urban and rural plans, property tax taxable activities should be taxed in accordance with the law. The "urban villages" we often talk about are located within the urban planning scope formulated by the local people's government in accordance with the "Urban and Rural Planning Law of the People's Republic of China". The tax authorities only focus on the "urban" location and not the "village" nature, which belongs to the scope of taxation stipulated in the "Provisional Regulations on Property Tax".

Case: Li ×× v. Majuqiao Tax Office of Tongzhou District Local Taxation Bureau of Beijing Municipality, et al.

 Case No.: (2016) Jing 03 Xing Zhong No. 100