China's Ministry of Finance and State Taxation Administration have phased out blanket urban land use tax exemptions for energy firms, introducing graduated rates from 1 September 2026 while carving out new permanent exemptions for specific infrastructure and safety assets. 

RF Report

China’s Ministry of Finance and the State Taxation Administration have jointly issued Announcement No. 22 of 2026 revising the urban land use tax policy on 27 July 2026, phasing out longstanding tax exemptions previously available to energy generation, mining, and oil and gas enterprises under regulations issued between 1989 and 2015.

Transition period locks in 50% discount

Previously exempt land under document (89) Guoshui Di Zi No. 013 (covering power and related sectors) shifts to a graduated schedule. From 1 September 2026 through 31 August 2027, companies pay half the standard urban land use tax. Starting 1 September 2027, the full rate applies, and the original exemption documents are repealed.

Targeted exemptions for infrastructure and safety assets

The announcement creates permanent exemptions for land used in specific functions across energy and extraction industries. Oil and natural gas producers—including those working with shale gas and coalbed methane—can skip tax on fire protection, flood control, wind protection and sand prevention facilities within industrial zones, plus dedicated rail lines and highways serving the operation outside the main production, office, and residential areas. Long-distance pipelines for oil and gas also qualify, including temporary construction land for these projects.

Hydroelectric facilities get broad coverage: reservoir inundation areas, dams (excluding power plant buildings themselves), dikes, slope protection, waterways and waterway infrastructure, fish stocking stations, fish passage facilities, irrigation systems, and flood discharge structures all sit outside the tax.

Nuclear plants qualify for exemptions on dike and slope protection land. Thermal power facilities and power supply companies escape tax on land supporting transmission lines and tower foundations, plus dedicated transportation corridors.

Coal mines receive exemptions for explosives depot safety zones, railway special lines, highways, and public parks and green belts outside the production area. Mining companies extracting metal or non-metal minerals, along with building materials producers, get similar treatment for explosives warehouse safety zones.

Documentation and next steps

Eligible companies must apply for the reductions and exemptions according to existing regulations, then maintain ownership certificates, land use permits, project documents, and related records.

The rules take effect immediately for new qualifying land, including any used during the construction phase of approved projects.