State Council to Abolish the Tentative Regulations on Urban Real Estate Tax and Foreign-Invested Enterprises, Foreign Enterprises/Organizations and Foreign Individuals

On December 31, 2008, the State Council released Decree No. 546 ordering the abolishment of the Tentative Regulations on Urban Real Estate Tax promulgated in 1951 (the "Abolished Urban Real Estate Tax Regulation"). Foreign-invested enterprises, foreign enterprises/organizations, and foreign individuals that had been regulated by the Abolished Urban Real Tax Regulation shall now comply with the Tentative Regulations on Real Estate Tax of the PRC, pursuant to which the real estate tax rate shall be 1.2% of the original value of the real estate minus 10% to 30% of the original value of the real estate (to be determined according to local ordinances), if the real estate is not rented. If real estate is rented, the real estate tax rate shall be 12% of the rental income.  The regulations in effect unify the previously separate foreign and domestic real estate tax system.

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