Abstract: The taxation of REITs needs to be examined from the perspective of taxability at both the economic level and the legal level. The investigation of the tax burden of REITs can be carried out in two directions of the principle of taxation of the beneficiary and the principle of taxation of the trustee, so as to prevent double taxation in the same REITs. The US experience shows that, in order to scientifically construct the REITs tax preferential system, China needs to study and formulate REITs Promotion Law, reasonably set market access conditions for REITs tax preferential treatment, adhere to the trust conduit principle, and establish tax preferential measures for REITs business organizations according to the different types of tax. For investors, it is necessary to establish a compulsory dividend system in accordance with law and exempt the income of REITs investors from taxation.

Keywords: trust conduit principle; taxation of the beneficiary; taxation of the trustee; REITs tax incentives

Author:Xi Yuemin, a research fellow at CASS Institute of Law and a professor at the Law School of the University Chinese Academy of Social Sciences.

Source: This article is published in Cai Jianchun and Lu Wendao (eds.), Forum of Securities Law (Volume 31, 2021), Law Press China, September 2021.