China Grants Tax Incentives to Logistics Industry

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Feb. 6 – In a move to further boost its logistics industry, China is now allowing logistics enterprises to pay less urban land use tax (ULUT) on lands occupied by their commodity warehouses.

According to the “Circular on the ULUT Policy Concerning the Lands Occupied by Logistics Enterprises’ Commodity Warehousing Facilities (caishui [2012] No. 13)” co-issued by the Chinese Ministry of Finance and State Administration of Taxation, between January 1, 2012 and December 31, 2014, land occupied by a logistics enterprise’s self-owned commodity warehousing facilities (for both self-use and renting out) are subject to 50 percent of the ULUT those enterprises were originally supposed to pay based on related regulations.

Circular No. 13 also defined the three specific terms being referred to in the document, namely logistics enterprises, commodity warehousing facilities, and lands occupied by warehousing facilities.

Logistics enterprises are those professional entities that provide warehousing and distribution services for industrial/agricultural production, circulation, import, export and residential life.

Commodity warehousing facilities shall cover a land area of over 6,000 square meters, and be used for the storage of agricultural products (such as cereals and cotton), agricultural production materials (such fertilizers and pesticides), mineral products (such as coal and coke), industrial raw materials (such as timber and rubber), and manufactured goods (such as food and beverages).

Lands occupied by commodity warehousing facilities refer to the area covered by both storage facilities (such as warehouses of various types and oil tanks) and supporting facilities of logistics operations (such as logistics-dedicated railway lines and piers).

China started implementing its latest “Interim Provisions on ULUT (State Council Decree No. 483)” in 2007. While the actual ULUT rates are determined by provincial governments, Decree No. 483 stipulated the ranges of annual ULUT rates applied in different types of cities:

  • Major cities: RMB1.5 – RMB30 per square meter
  • Medium-sized cities: RMB1.2 – RMB24 per square meter
  • Small-sized cities: RMB0.9 – RMB18 per square meter
  • Counties, towns, industrial and mining areas: RMB0.6 – RMB12 per square meter

Dezan Shira & Associates is a boutique professional services firm providing foreign direct investment business advisory, tax, accounting, payroll and due diligence services for multinational clients in China. The firm specializes in assisting foreign enterprises with their tax obligations. For advice, please email, visit, or download the firm’s brochure here.

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