China Halves Land Use Tax For Large Warehouses

by Mary Swire, Tax-News.com, Hong Kong

06 February 2012

China’s State Administration of Taxation has announced that, within a policy of promoting the development of the country’s logistics sector, the urban land use tax has been reduced for large warehouses.

The tax will be halved for storage facilities, occupying an area of more than 6,000 square metres, with effect from January 1, 2012, to December 31, 2014. The land covered by the tax reduction includes not only the various types of warehouses, but also storage tanks, distribution centres, freight yards, and railway lines, docks and roads supporting loading and unloading facilities.

A list is provided of the eligible goods to be stored, including agricultural products, such as grain, cotton, oilseeds, sugar, vegetables, fruits, meat, fertilizers and pesticides; and industrial goods, such as coal, coke, steel, cement, crude oil, refined oil products, chemicals, rubber, wood, pulp and paper products, building materials, plastics, textiles pharmaceuticals, medical devices, machinery and electronic products.

While it is said that the overall effect of the tax reduction on the country’s revenues may be relatively small, the benefit to each individual warehouse may be significant, given that, in large cities, the annual urban land use tax can reach RMB10 (USD1.58) per square metre of occupied land.

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