Announcement NO. 5, 2023 by the Ministry of Finance and the State Administration of Taxation

Policy Contents

According to the “Announcement on Continuing to Implement Tax Preferential Policies on Urban Land Use Tax for Logistics Enterprises' Bulk Commodity Warehousing Facilities by the Ministry of Finance and the State Administration of Taxation”, from January 1, 2023, to December 31, 2027, logistics enterprises' self-owned (including for their own use and rental) or leased bulk commodity warehousing facilities' land will be subject to a 50% reduction in urban land use tax based on the applicable tax amount standard of the corresponding land level.

Scope of Policy Application

Logistics enterprises in this Announcement referred to those engaged in at least one of the warehousing or transportation businesses, providing third-party logistics services for the production, circulation, import and export, and residents' daily life of agriculture and industry products, independently accounting, bearing civil liability independently, and registered with the business registration department as professional logistics, warehousing or transportation enterprises.

Bulk commodity warehousing facilities referred to warehousing facilities that occupy an area of 6,000 square meters or more in the same facility, mainly storing agricultural products and agricultural production materials, such as grain, cotton, oil, sugar, vegetables, fruits, meat, aquatic products, fertilizers, pesticides, seeds, and feed, as well as mining products and industrial raw materials, such as coal, coke, minerals, non-metallic minerals, crude oil, finished oil, chemical raw materials, wood, rubber, pulp and paper products, steel, cement, non-ferrous metals, building materials, plastics, and textile raw materials.

Warehousing facility land in this Announcement includes land used for various storage facilities, such as warehouses (including distribution centers), oil tanks (pools), cargo yards, sun-drying areas (stacking yards), sheds, and land used for logistics operations supporting facilities such as railway dedicated lines, docks, roads, and loading and unloading areas.

Policy Background

To promote the healthy development of the logistics industry, the tax preferential policy on urban land use tax for logistics enterprises' bulk commodity warehousing facilities will continue to be implemented.

Q&A

1. Can tax incentives be enjoyed by leasing own land to logistics companies for bulk commodity warehousing?

Answer: Yes. According to Announcement No. 5, the entities that are eligible for tax incentives for urban land use tax on land used for logistics enterprises' bulk commodity warehousing facilities include logistics enterprises that own or lease land for bulk commodity warehousing facilities, as well as individuals or units that lease land for bulk commodity warehousing facilities to logistics enterprises.

1. A professional logistics company has built two warehouses on its own land in the north and south of the city, mainly used for storing industrial raw materials such as steel and cement. The warehouse in the north covers an area of 3000 square meters, and the warehouse in the south covers an area of 7000 square meters. Can they enjoy tax incentives?

Answer: According to Announcement No. 5, tax incentives can only be enjoyed by "the same" warehousing facility that covers an area of 6,000 square meters or more. As the warehouses are located in two different areas, they should be assessed separately to determine whether they meet the criteria for tax incentives. The warehouse in the north covering an area of 3000 square meters does not meet the requirements stated in the announcement and cannot enjoy the tax incentives. However, the warehouse in the south covering an area of 7000 square meters meets the criteria and can enjoy the tax incentives.

1. A professional logistics company occupies an area of 9000 square meters with its own warehouse mainly used for storing vegetables, fruits and other agricultural products. The warehouse covers an area of 6500 square meters, and the road, loading and unloading areas cover an area of 1500 square meters. The office and living area covers an area of 1000 square meters. How much area can the company enjoy tax incentives for?

Answer: The company can enjoy tax incentives for the warehouse area of 6500 square meters and the road, loading and unloading areas covering an area of 1500 square meters, which are classified as land used for bulk commodity warehousing facilities according to the policy. However, the office and living area covering an area of 1000 square meters do not fall under the scope of the tax incentives policy and should pay urban land use tax according to regulations.

1. The company meets the criteria for tax incentives for logistics enterprises' bulk commodity warehousing facilities, and the warehouse facility covers an area of 8000 square meters. The tax rate for urban land use tax in the location is 5 yuan per square meter. How much urban land use tax should the company pay for the warehouse area in 2023?

Answer: According to Announcement No. 5, the eligible logistics enterprises' bulk commodity warehousing facilities should pay 50% less urban land use tax based on the tax rate for their land grade. Therefore, the urban land use tax the company should pay for the warehouse area in 2023 is calculated as follows: Warehouse area x Tax rate for urban land use tax x (1 - 50%) = 8000 x 5 x (1 - 50%) = 20000 yuan.