On October 18, 2010, the State Council issued the Circular on Unifying Urban Maintenance and Construction Tax (UMCT) and Education Surtax (EST) System for Domestic and Foreign Invested Enterprises (the 'State Circular 2010'GUOFA '2010' NO.35) announcing to levy UMCT and EST on foreign invested enterprises (FIEs) and foreign individuals from December 1, 2010.

 
In accordance with the State Circular 2010 released by the State Council, on November 4, 2010, the Ministry of Finance and the State Administration of Taxation jointly released the Circular on Levying Urban Maintenance and Construction Tax and Education Surtax System on Foreign Invested Enterprises(the 'CAISHUI Circular 2010', CAISHUI'2010'NO.103).
 
On February 8, 1985, China adopted the Provisional Regulations of the People's Republic of China on City Maintenance and Construction Tax; on April 28, 1986, China adopted the Provisional Regulations of the People's Republic of China on Education Surtax, and in accordance with these two Regulations both UMCT and EST are not applicable to foreign invested enterprises and foreign individuals, and only applicable to domestic companies and individuals.
 
After exemption from UMCT and EST taxation for 25 -26 years,in accordance with the State Circular 2010 and theCAISHUI Circular 2010 , UMCT and EST will be levied on FIEs and foreign individuals from December 1, 2010, then there will be no difference on these two kinds of taxation between domestic and foreign companies. It is said that this is a further step of China government's efforts to unify taxation system for both domestic PRC enterprises and FIEs in China.