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As a continuation in encouraging the healthy growth of the logistics sector, the Ministry of Finance and the State Administration of Taxation announced the following policies for land utilized by logistics firms for bulk commodities storage facilities:
1. From January 1st, 2023, to December 31st, 2027, land for bulk commodity storage facilities owned or leased by logistics firms will be subject to a 50% reduction in the relevant tax normal for the land class to which they belong.
2. The logistics enterprises (registered as a professional logistics firm), must include at least one type of warehousing or transportation business, providing logistics services such as warehousing and distribution for industrial or agricultural production, import-export, etc.
3. The bulk commodity storage facility must cover an area of 6,000 square meters or more and primarily store agricultural products and agricultural production materials, mineral products, and industrial raw materials.
4. The property listed comprises of all types of warehouses, oil tanks, freight yards, drying yards, canopies, and other storage facilities.
5. Land utilized for logistics businesses' offices, residential spaces, and all the other lands not directly used for bulk commodity storage, are not included in the scope of the tax reduction specified in the announcement, and urban land use tax will be imposed in line with the relevant rules.
6. Taxes that should have been lowered and paid prior to the date of publication of this announcement shall be deducted from the taxpayer's tax liability or refunded.
7. Taxpayers who benefit from the tax reduction should declare their tax deductions and exemptions in accordance with the regulations, and save real estate ownership certificates, land use certificates, lease agreements, and other documentation for future reference.
At PHC Advisory we are always aware of all the news and amendments concerning tax compliance in China. If you want to know more or have a query for us, please send an email to info@phcadvisory.com.
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