Core Viewpoint - The public REITs market in China has surpassed 150 billion yuan in issuance, evolving into a dual-driven model of "initial issuance + expansion" and becoming a crucial financial tool for revitalizing existing assets and supporting the real economy [1] Group 1: Business Background - The public REITs market has expanded to over 10 asset types, with a significant focus on infrastructure projects [1] - The issuance of public REITs has entered a normalization phase following the release of government notifications aimed at promoting regular issuance [1] - Infrastructure public REITs typically adopt a "debt structure" to establish cash flow, ensuring regular distribution of distributable amounts to investors [2] Group 2: Tax Observations - Current regulations regarding corporate income tax interest expense deductions are influenced by the commercial rationale and the interest rate levels of the debt structure [3] - Tax authorities may question the commercial rationale of interest expenses and their relevance to the company's operations [2] - There is a lack of uniformity among tax authorities regarding the recognition of "financial enterprises' same-type loan rates," leading to potential disputes over interest expense deductions [2] Group 3: VAT and Property Tax - The new VAT law will take effect on January 1, 2026, but there is uncertainty regarding the tax rate for "old projects" and the transition from existing VAT regulations [4] - The public REITs market is experiencing downward trends in rental income due to economic fluctuations, which may impact property tax calculations and actual tax burdens [5][6] - Changes in property tax calculation methods could introduce compliance risks and affect cash flow distributions for project companies [8] Group 4: Income Tax Considerations - Public funds and special plans are not subject to corporate income tax, but income distributed to investors is subject to taxation based on their legal status [9] - Different tax regulations apply to corporate and individual investors regarding dividend income and capital gains from fund share transfers [10] - Continuous monitoring of tax policy changes is essential for managing tax risks associated with public REITs and their multi-layered structures [10]