For the purpose of rationalizing the use of land in cities and towns, regulating the income differential on land, improving efficient use in use and strengthening land management, the State Council amended Provisional Regulations on Urban Land Use Tax ("the “New Regulations”). The New Regulations came into force on January 1, 2007.

Under the New Regulations the annual rates for Land Use Tax are tripled. The details rates are as follows:

i) between 1.5 yuan and 30 yuan in large cities;

ii) between 1.2 yuan and 24 yuan in medium cities;

iii) between 0.9 yuan and 18 yuan in small cities;

iv) between 0.6 yuan and 12 yuan in county towns, towns/bases operated under an organizational system, and industrial and mining districts.”

According to Article 2 of the New Regulations, the New Regulations apply to foreign invested enterprises, foreign enterprises, and foreign individuals.

The New Regulations also state that the implementing measures formulated by province-level governments need not be filed with the Ministry of Finance.