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Chapter V Administration of Tax Deduction, Exemption and Refund

Document No.:

Taxes:Land Appreciation Tax,Urban & Township Land Use Tax

Date of Promulgation:

IssueDepartment:Ministry of Land and Resources

Date of Implementatio:2016-04-01


Chapter VAdministration of Tax Deduction, Exemption and Refund

Article XLPursuant to theprovisions of the Provisional Regulations and its implementation regulations,farmland occupation tax shall be exempted or deducted in the following cases:

i. Farmland occupation tax shall be exempted from theoccupation of taxable land by military facilities.

Tax-free military facilities include: above-ground andunderground military command and combating engineering; military airports,ports, and docks; camps, training grounds and testing grounds; military cavedepots and warehouses; military communication, reconnaissance, navigation andobservation stations and measurement, navigation and aid-to-navigation marks;military highways and railway special lines, military communication andtransmission lines and military oil and water delivery pipelines; otherfacilities directly used for military applications.
ii. Farmland occupation tax shall be exempted from the occupation of taxableland by schools, kindergartens, nursing homes and hospitals.

Tax-free schools include universities, high schools,primary schools, diploma-oriented vocational schools and special educationschools whose establishment has been approved by the administrative departmentsfor education of people’s governments at the county level and above. Technicalschools have been approved to be established by human resources and socialsecurity administrative departments of the State Council, people’s governmentsof provinces, autonomous regions and municipalities directly under the CentralGovernment and their human resources and social security administrativedepartments. The occupation of the taxable land by schools’ business places andteaching and administrative staff’s housing shall pay farmland occupation taxin accordance with the local applicable tax amount.
Tax-free kindergartens’ specific scope is limited to the places specially usedfor child care and education in the kindergartens which have been registered orput on file with the administrative departments for education of people’sgovernments at the county level.

Tax-free nursing homes’ specific scopeis limited to the places specially used to provide senior people care in thepension institutions which have been approved to be established.
Tax-free hospitals’ specific scope is limited to the places specially used toprovide health care services and their supporting facilities in the hospitalswhich have been approved to be established by the administrative departmentsfor health of people’s governments at the county level and above.

iii. The occupation of taxable land by railway lines,highway routes, airport runways, landing fields, ports and channels shall payfarmland occupation tax according to the reduced tax amount of two Yuan persquare meter.

According to the actual needs, after the in-chargefinance and taxation departments under the State Council consult with otherdepartments concerned under the State Council and report to the State Councilfor approval, for the situations prescribed by the proceeding clause, farmlandoccupation tax can be exempted or reduced.
Tax-deducted railway lines’ specific scope is limited to railway beds, bridges,culverts, tunnels and the land alongside their two sides prescribed by theregulations. The occupation of the taxable land by special railways and railwayspecial lines shall pay farmland occupation tax according to the localapplicable tax amount.
Tax-deducted highway routes’ specific scope is limited to the state roads,provincial roads, county roads, township roads, principal parts of villageroads belonging to rural highways and the side trenches alongside their twosides and intercepting drains which have been approved to be built. Theoccupation of the taxable land by special highways and driveways in urban areasshall pay farmland occupation tax according to the local applicable tax amount.
The scope of tax-deducted airport runways and landing fields is limited to theplaces specially used for civil aircrafts’ taking-off and landing, gliding andparking in the civil airports which have been approved to be constructed.

Tax-deducted ports’ scope is limited to the places usedfor vessels’ entry and exit and anchoring, for passengers’ embarking anddisembarking and for goods’ loading and unloading.

Tax-deducted channels’ scope is limited to the passages forvessels’ safe navigation in the waters of rivers, lakes and harbors.
iv. Rural residents who occupy taxable land to build new houses shall payfarmland occupation tax with a 50% reduction of the local applicable tax amount.

The case where rural residents occupy the tax-deductedtaxable land to build new houses refers to the case where rural residents areapproved to occupy the taxable land to build houses for self-use in theirregistered residence places according to the prescribed standards.

Where rural residents are approved to move out and thustheir original house sites are restored to farmland, if the areas of theirnewly built houses occupying the taxable land exceeding their original housesites, farmland occupation tax shall be collected on the exceeded areas with a50% reduction of local applicable tax amount.
v. Where members of a rural revolutionary martyr’s family, crippled soldiers,the widower, the widow, the orphan and the childless and rural residents,living in the old revolutionary bases, the areas inhabited by ethnic minoritiesand the remote and poverty-stricken mountain areas, do have difficulties inpaying farmland occupation tax when they build new houses within the prescribedland-use standards, after it is examined and verified by local townshippeople’s governments first and then it is submitted to county people’sgovernments for approval, farmland occupation tax can be exempted or deducted.

Members of a rural revolutionary martyr’s family includethe parents, spouse and children of the rural revolutionary martyr.

The standard for rural residents, living in the oldrevolutionary bases, the areas inhabited by ethnic minorities and the remoteand poverty-stricken mountain areas, shall be executed in accordance with theregulations prescribed by the people’s governments of all provinces, autonomousregions and municipalities directly under the Central Government.

vi. Other cases where farmland occupation tax exemptionand deduction have been  defined by theMinistry of Finance and the State Administration of Taxation.
Article XLIThe record-on-fileadministration is introduced for the deduction and exemption of farmland occupationtax.

Article XLII Taxpayers whomeet the requirements of farmland occupation tax deduction and exemption shall recordtax deduction and exemption on file with the in-charge taxation authorities within30 days after they receive the notice of going through farmland occupation tax proceduresgiven by land administration departments.

The in-charge taxation authorities shall, within 30 daysafter the taxpayers complete the procedures of recording tax deduction andexemption on file, put it on file with the local taxation authorities ofprovinces or the local taxation authorities authorized by the local taxationauthorities of provinces.
Article XLIIITaxpayers who meet therequirements of farmland occupation tax deduction and exemption shall,according to different conditions, submit the Registration Form for the Filingof Taxpayers’ Tax Deduction and Exemption and one of the following materials:

i. Evidentiary documents for the occupation of thetaxable land by military facilities;

ii. Evidentiary documents for the occupation of thetaxable land by schools, kindergartens, nursing homes and hospitals;

iii. Evidentiary documents for the occupation of thetaxable land by railway lines, highway routes, airport runways, landing fields,ports and channels;

iv. Evidentiary documents for the occupation of thetaxable land by rural residents to build new houses;

v. The original and duplicated reply documents,concerning deducting and exempting tax from the rural residents who do havedifficulties, approved by people’s governments at county level and the originaland duplicated applicants’ ID;

vi. Evidentiary documents for other farmland occupationtax deduction and exemption prescribed by the Ministry of Finance and the StateAdministration of Taxation.
Article XLIVLocal taxationauthorities at all levels shall strengthen the subsequent administration onfarmland occupation tax deduction and exemption, regularly perform supervisionand examination on their subordinate local taxation authorities and carry outrandom and spot inspection on tax-deducted or tax-exempted taxpayers.

The subsequent administration on non-taxable situationsshall be executed by referring to the proceeding clause.
Article XLVWhere taxpayers havechanged the use of the land after its farmland occupation tax had been exemptedor deducted in accordance with the law and thus the occupation of the land doesnot belong to the scope of farmland occupation tax exemption or deduction, theyshall make up farmland occupation tax in accordance with the local applicabletax amount.

Article XLVIOther mattersconcerning the administration of the filing of farmland occupation taxdeduction and exemption shall be executed pursuant to the relevant regulationsof the Administrative Measures for Tax Deduction and Exemption (issued byAnnouncement No. 43 of the State Administration of Taxation in 2015).
Article XLVIITaxpayers can applyfor the refund of the paid farmland occupation tax in the following cases:

i. Where taxpayers restore the land to its former state withinthe approved time limit of the temporary land occupation;

ii. Where units or individuals restore the land to itsformer state within two years after they damage the land;

iii. Other situations prescribed bytaxation laws and regulations.

Article XLVIIIRestoration ofthe land to its former state shall be affirmed by land administrationdepartments jointly with administrative departments concerned, which shallissue acceptance certificates to taxpayers, pursuant to the provision of theRegulation on Land Reclamation.

Article XLIXProceduralrequirements of farmland occupation tax refund shall be executed pursuant tothe relevant regulations of tax refund administration.

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