Land and Property Policy News
- Domestic firms hail even tax structure
Date: 3-Jan-2007 Sources: (Xinhua Online)
Overseas-invested companies did not want the many special privileges they had been enjoying to end but Chinese businesses were cheering the new arrangement because it would give them a more even playing field.
From Jan. 1, joint ventures and wholly overseas-owned firms, too, came under the purview of the land-use tax.
Also, a new corporate income tax structure is likely to be implemented later this year to ensure that foreign and domestic firms are taxed at the same rate and end years of special corporate tax breaks for overseas firms.
The land-use or property tax rate will now apply equally both to local and overseas developers and will triple the old rate, set in 1988.
In large cities, the annual property tax rate will range from 1.5 yuan (about 19 U.S. cents) to 30 yuan (.3.80 dollars) per square meter depending on the location of the land and its use. In medium-sized cities, the rate will range from 1.2 yuan (15 U.S. cents) to 24 yuan (3 dollars) per square meter; it will vary from 0.9 yuan (12 U.S. cents) to 18 yuan (U.S. 2.40) in small cities; and will be 0.6 yuan (7.7 U.S. cents) to 12 yuan (1.50 dollars) in counties, townships and mining areas.
The first revision of land-use tax regulations since 1988 is expected to improve control and planning for development and re-development of land, sources in the Legislative Affairs Office of the State Council 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 sources said, citing figures of the National Bureau of Statistics.
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