11/7/2018-7

“Selling shells" sales increase 7 years 126 transactions

There has been an increase in the number of cases in which shell companies are being sold for sale. The local research institute said that in the past seven years, the number of “selling shells" verified was 126, and the potential tax avoidance amounted to nearly 9.4 billion yuan. Nearly 80% of cases occurred in 2016. After the government added hot, it was a hole in the hole.

The local research institute published a study on tax avoidance through the company’s equity transfer housing (commonly known as selling shells). The report collected news reports and found that the first stamp duty was introduced in November 2010 to 5.6 in May this year. The sale of shells involved a property value of 32.77 billion yuan and a potential tax avoidance amount of 9.35 billion yuan.

Nearly 60% of foreign buyers

The data also showed that the above-mentioned “selling cases" were concentrated in November 2016 after the Government “added spicy" (15% increase in residential stamp duty), involving 96 cases, accounting for nearly 80% of the total. From November 20th to November 4th, 2016, 30 cases were recorded, a substantial increase of 2 times. The amount of tax avoidance involved in the case also reached $8.3 billion.

At the same time, the study pointed out that nearly 60% of the buyers who bought the property through “selling shells" belonged to foreign buyers (21%), foreign registered companies (17%) and less than seven years of immigration (18%). In general, it is necessary to pay a total of 30% of the buyer’s stamp duty and double stamp duty.

Yau Tsim Mong South District

Chen Xianen, a member of the local research society, said that the loophole in equity transfer has created obvious economic incentives for foreign investors and entered the Hong Kong market for speculation, making it difficult for ordinary citizens to compete with their housing resources.

If it is geographically divided, it will be the most sold in the Yau Tsim Mong District, Southern District and Wan Chai District. It will account for a total of 62% of the total, including the luxury homes such as Yau Tsim Mong, King Kam Tin and Tin Yue Estate.

Huang Yuhong, a member of the local research society, said that the current equity transfer loopholes are inconsistent with the trend of global tax reform, which makes the land supply “big debate" or “six strokes" increase supply measures, and hopes to study and promote the government reform system.

Legislators in the Legislative Council, Mr Leung Chi-chang, said that it is not difficult for the Government to block the loopholes. It is recommended to follow the experience of foreign countries in order to obtain the beneficial ownership of the property. It is necessary to collect property stamp duty from property traders for equity transfer and to establish an inter-departmental “property company". The controller database is open to the public for inspection.

However, some analysts believe that the “selling shell" transaction is still not widespread. For example, the number of residential transactions involved in the same period was as high as 490,000. According to the 126 verified by the local research institute, it can only be said to be a relatively small number.

A Government spokesman replied that the Inland Revenue Department has been reviewing suspected speculative cases involving the transfer of shares in property companies to ensure that profits derived from property speculation are properly taxed.