[photopress:chinalandandresources.jpg,full,alignright]Joint ventures and wholly foreign-owned firms are no longer exempt from paying land-use tax. Also, later this year a new corporate income tax structure is expected to be passed and implemented that will see foreign and domestic firms taxed at the same rate, ending years of special corporate tax breaks for overseas firms.
The land-use or property tax rate will now apply equally to both local and foreign developers and will triple the old rate which was set in 1988.
In large cities the annual property tax rate will range from RMB 1.5 to RMB 30 per square meter depending on its location and type of use. In medium sized cities the rate will range from RMB 1.2 to RMB 24 yuan per square meter, in small cities the rate will vary from RMB 0.9 to RMB 18 and counties, townships and mining areas property will be taxed at a rate of between RMB 0.6 to RMB12 per square meter per year.
This first revision of land-use tax regulations since 1988 is aimed at bringing better control and better planning to the development and re-development of land, according to sources with the Legislative Affairs Office of the State Council.
Sources, citing figures of the National Bureau of Statistics, said, ‘The rate increase is reasonable when you consider the country’s consumer price index in 2005 was 2.1 times higher than in 1987.’
The State Council will begin on July 1st a three-year program to develop a comprehensive land-use registry which will involve surveying every parcel of land and classify its use to protect agricultural lands and allow for more coherent development on landzoned for industrial, commercial or residential use.
The land use and tax changes to ensure foreign firms and domestic companies are treated equally are being seen as a coming of age for China’s economy, the power of its domestic market and the initiative and abilities of its indigenous entrepreneurs.
Source: Xinhua