Urban & Township Land Use TaxIn case of divergence of interpretation, the Chinese text shall prevail.

Notice on the Preferential Policies Concerning Heating Enterprises’ VAT, House Property Tax and Urban and Township Land Use Tax

Document No.:Cai Shui [2016] No.94

Taxes:Urban & Township Land Use Tax

Date of Promulgation:

IssueDepartment:Ministry of Finance,State Administration of Taxation

Date of Implementatio:2016-08-24


Issued by: the Ministry of Finance and the State Administration of Taxation

Document No.: Cai Shui [2016] No.94

Date of Issuance: 2016-8-24

Financial Departments (Bureaus), State Taxation Bureaus and Local Taxation Bureaus of Beijing, Tianjin, Hebei, Shanxi, Inner Mongolia, Liaoning, Dalian, Jilin, Heilongjiang, Shandong, Qingdao, Henan, Shannxi, Gansu, Ningxia, Xinjiang and Qinghai Provinces (Autonomous Regions, Municipalities Directly under the Central Government and Cities Specifically Designated in the State Budgetary Plan) and Financial Bureau of Xinjiang Production and Construction Corps,

To safeguard residents’ heat supply, upon approval by the State Council, the policies concerning VAT, the house property tax and urban and township land use tax of heating enterprises in “Sanbei(North of Sanxi Province)” regions (hereinafter referred to as heating enterprises) are hereby notified as follows:

I. From January 1st, 2016 to the end of the heating period in 2018, heating enterprises shall be exempted from the VAT for their heating fee income obtained by providing heat to resident individuals (hereinafter referred to as residents).

The heating fee income obtained by providing heat to residents include the heating fees directly collected from residents by heating enterprises, those collected from residents through other units and those paid by units on behalf of residents.

The VAT-free heating fee income shall be separately calculated according to Article XVI of the Interim Regulation of the People’s Republic of China on the VAT. Manufacturing enterprises of thermal products, which provide heat to residents via operation enterprises of thermal products, shall determine the tax-free income ratio according to the percentage of the heating fee income actually obtained from residents by the operation enterprises of thermal products accounting for the their total heating fee income.

The heating period, mentioned in this article, refers to a period starting from the second half of the current year when heating begins, to the first half of the next year when heating ends.

II. From January 1st, 2016 to December 31st, 2018, the heating enterprises, which provide heat to residents and thus collect heating fees from them, shall be exempted from the house property tax and the urban and township land use tax for their factory workshops and land used for providing heat to residents; For their factory workshops and land used for other purposes, they shall pay the house property tax and the urban and township land use tax according to regulations.

For professional heating enterprises, their house property tax and urban and township land use tax to be exempted shall be calculated according to the percentage of the heating fee income obtained by providing heat to residents accounting for their total heating fee income. 

For heating enterprises, which run other businesses concurrently, their house property tax and urban and township land use tax to be exempted shall be calculated according to different methods based on whether their factory workshops and land used for providing heat and those used for other operation activities can be divided. For those which can be divided, their tax to be exempted and deducted for factory workshops and land used for providing heat shall be calculated according to the percentage of the heating fee income obtained by providing heat to residents accounting for their total heating fee income. For those which cannot be divided, their tax to be exempted and deducted for their total factory workshops and land shall be calculated according to the percentage of the heating fee income obtained by providing heat to residents accounting for their operating income.

For self-heating units, their house property tax and urban and township land use tax to be exempted for the factory workshops and land used for providing heat shall be calculated according to the percentage of the construction area providing heat to residents accounting for the total heating construction areas.

III. The heating enterprises mentioned in the notice refer to the manufacturing enterprises and operation enterprises of thermal products. The manufacturing enterprises of thermal products include professional heating enterprises, heating enterprises which run other businesses concurrently, and self-heating units. 

IV. The “Sanbei” areas mentioned in the notice refer to Beijing Municipality, Tianjin Municipality, Hebei Province, Shanxi Province, Inner Mongolia Autonomous Region, Liaoning Province, Dalian City, Jilin Province, Heilongjiang Province, Shandong Province, Qingdao City, Henan Province, Shannxi Province, Gansu Province, Qinghai Province, Ningxia Hui Nationality Autonomous Region and Xinjiang Uygur Autonomous Region.



The Ministry of Finance and the State Administration of Taxation

August 24th, 2016


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