Environmental Protection Tax Law Go back »
2017-01-03 | All chapters
On December 25, 2016, the Law of the People’s Republic of China on Environmental Protection Tax (Environmental Protection Tax Law) was promulgated at the 25th meeting of the 12th Standing Committee of the National People’s Congress, and will come into effect from 1 January 2018.
The Environmental Protection Tax Law embodies five chapters, 28 articles and two tables. It is the first singe tax law in China concentrating on pollution control and enhancing eco-friendly development, in order to be consistent with the principles of the revised Law of the People’s Republic of China on Environmental Protection, and will replace the Regulations on Administration of Levy and Use of Pollutant Discharge Fee. It will also exert tremendous impact on manufacturers and other relevant business operators. Moreover, such taxation will increase the operating costs of polluting enterprises so as to discourage capital from investing in high-polluting industries.
The Environmental Protection Tax Law clearly stipulates the range of tax payers, including enterprises, public institutions and other production and business operators that directly discharge taxable pollutants to the environment within the territory of the People's Republic of China and other sea waters under the jurisdictions thereof. But there are two exceptions : 1) enterprises, public institutions and other production and business operators that discharge taxable pollutants to duly established sewage treatment plants and domestic garbage disposal fields; 2) enterprises, public institutions and other production and business operators that store or dispose of industrial solid waste in facilities and premises that are in compliance with environmental protection standards.
The objects of taxation are the taxable pollutants, referring to air pollutants, water pollutants, solid waste and noise stipulated in the Table of Taxable Items and Tax Rates of Environmental Protection Tax and the Table of Taxable Pollutants and Their Equivalent Value.
The tax items and tax rates shall be governed by the Table of Taxable Items and Tax Rates of Environmental Protection Tax. The specific applicable tax rates of the taxable air pollutants and water pollutants shall be determined and adjusted on the basis of local environmental capacity, status quos of pollutants discharge and goals and requirements of economic, social and ecological development, and reported by the provincial, autonomous district or self-governed municipal people’s government to the local standing committee of the people’s congress for approval and filed to the Standing Committee of the National People’s Congress and the State Council for records.
The Environmental Protection Tax Law also lists five circumstances of tax exemption and two conditions of tax reduction. For instance, where taxable pollutants are discharged during agricultural production (excluding large-scale cultivation), the environmental protection tax shall be waived.
With respect to tax collection and administration, tax authorities shall collect and conduct administration of environmental protection tax in accordance with the Law of the People's Republic of China on Tax Collection and Administration and the Environmental Protection Tax Law, while competent environmental protection departments shall monitor the taxable pollutants. Tax payers shall file the taxes truthfully pursuant to relevant laws and regulations, and shall be responsible for authenticity and integrity of the filings.
If you have the English translation and are willing to share it, please contact Mr. Kevin GAO kgao@europeanchamber.com.cn.
