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Notice Of The Chongqing Municipality On Promoting The Planning And Development Of Local Taxation Policies In Urban And Rural Areas, issued on November 7, 2007 and will take effect on January 1, 2008

1.      According to the Notice, what shall be exempted from certain tax and how long will the exemption last?

Ordinary residential houses provided to employees moving from rural areas by enterprises unconditionally or at a price equal to the price of government low-rent houses shall be exempted from property tax for 5 years. Proceeds gained by enterprises from the aforesaid properties shall be exempted from business tax and related surcharging taxes for 3 years.  

Non-profit-making medical institutions shall be exempted from property tax and urban land use tax. Irrigation, water supply and drainage facilities invested in and installed in rural areas shall also be exempted from property tax and land use tax.  

For projects of sightseeing agriculture, tourist agriculture and ecological agriculture in rural areas, property tax and urban land use tax are exempted for three years.

For income generated from providing credit guarantee or re-guarantee services for agricultural development and development of damming areas by small to medium sized credit guaranteeing and re-guaranteeing institutions approved by the relevant government departments, business tax and surcharging taxes shall be exempted for five years. 

Housing property tax and the urban land use tax will be exempted for a year for enterprises at municipal levels that are deemed to be in dire straits by the departments listed in the Notice in that particular year.    

For income gained from the sales of houses for settling immigrants, the business tax for sale of real properties and additional duty will be exempted, regardless of whether the sizes of the houses exceed the original sizes. Also, income gained from the selling of houses for the allocation of migrants from damming areas will be exempted.

For vehicles owned by public transportation enterprises deployed in passenger-carrying services in rural areas, a reduction of 50% with respect to vehicle and vessels tax will be applied until the end of 2010.

2.      What is the lower threshold for collecting business tax? 

The lower threshold for collecting business tax (in terms of sales amount) will be raised from RMB2,000 to RMB5,000 under the Notice.



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