Tax Issues Related to Housing Containers

Tax issues related to housing containers mainly involve two aspects: property tax and value-added tax (VAT), as detailed below:

Property Tax

• Container itself: According to the "Interim Regulations of the People's Republic of China on Property Tax," the scope of property tax collection is limited to cities, counties, administrative towns, and industrial and mining areas, with the taxable objects being immovable properties with complete structures and functions. Due to their mobility and non-fixed nature, containers do not fall within the definition of real estate and are therefore not subject to property tax.
• Modified houses: If a container is transformed into a house with residential or business functions and meets the local definition of real estate (e.g., fixed to the land, having independent usability, etc.), it is subject to property tax. The tax base is usually the original value of the house or rental income, and the tax rate is determined by local tax authorities based on actual conditions. For example, the annual tax rate for ad valorem taxation is 1.2%, and the tax rate for taxation based on rental income is 12% (subject to local regulations).

Value-Added Tax (VAT)

• International transportation-related leasing: If a company possesses qualifications as an international freight forwarding agent and the container leasing services are exclusively used for overseas transportation (e.g., export transportation from domestic stations to overseas stations), according to VAT regulations, such services are not considered domestic sales and are eligible for tax exemption, with no need to withhold and remit VAT. For example, if a company leases containers to an overseas company for international freight transportation and the entire service is completed overseas, the tax exemption clause applies.
• Export tax refunds for container houses: According to the "Interim Regulations on Value-Added Tax," export goods that meet certain conditions (e.g., being VAT-taxable goods, having paid VAT, etc.) are eligible for tax refunds. However, the regulations do not explicitly mention the tax refund policy for exported container houses. In practice, a comprehensive assessment is required based on the nature of the container house (e.g., whether it is considered movable goods, whether it is included in the export tax refund commodity list, etc.) and interpretations by local tax authorities. If a container house is deemed movable goods and meets the tax refund conditions, it may be eligible for export tax refunds; otherwise, it must be treated as domestic sales.

Summary: Tax issues related to housing containers must be handled differently based on their usage and nature. Containers themselves are not subject to property tax, while modified houses may be; international transportation-related leasing is tax-exempt, and export tax refunds require assessment based on specific policies. It is recommended that taxpayers consult local tax authorities for accurate guidance based on their actual business models.