All material subject to strictly enforced copyright laws. © 2022 ITR is part of the Euromoney Institutional Investor PLC group.

FREE: China’s nationwide resource tax starts next month

China’s State Council has confirmed that the recently trialled resource tax on domestic sales of crude oil and natural gas will be extended nationally from November 1.

The tax, which was trialled in some of the country’s poorest regions, will be extended to re-balance tax revenues between central and local governments.

The finance ministry announced in January that the tax will be rolled out within five years, but this has been brought forward.

That announcement confirmed that the benchmark rate will continue at 5% but may vary depending on the particular resource. The tax will be levied on the value rather than the quantity of the resource.

According to the State Council, a range of tax rates is permitted, rather than a specific rate. For crude oil and natural gas sales, that range is fixed at between 5% and 10%, but it is considered that, in the present high price market, the lower 5% rate will be maintained for the time being.

The tax on crude oil was up to Rmb30 ($4.54) per tonne under the old system and will increase significantly to around RmbB185 per tonne based on the average oil price of $75 per barrel.

More from across our site

The state secretary told the French press that the country continues to oppose pillar two’s global minimum tax rate following an Ecofin meeting last week.
This week the Biden administration has run into opposition over a proposal for a federal gas tax holiday, while the European Parliament has approved a plan for an EU carbon border mechanism.
Businesses need to improve on data management to ensure tax departments become much more integrated, according to Microsoft’s chief digital officer at a KPMG event.
Businesses must ensure any alternative benchmark rate is included in their TP studies and approved by tax authorities, as Libor for the US ends in exactly a year.
Tax directors warn that a lack of adequate planning for VAT rule changes could leave businesses exposed to regulatory errors and costly fines.
Tax professionals have urged suppliers of goods from Great Britain to Northern Ireland to pause any plans to restructure their supply chains following the NI Protocol Bill.
Tax leaders say communication with peers is important for risk management, especially on how to approach regional authorities.
Advances in compliance tools in international markets and the digitalisation of global tax administrations are increasing in-house demand for technologists.
The US fast-food company has agreed to pay €1.25 billion to settle the French investigation into its transfer pricing arrangements over allegations of tax evasion.
HM Revenue and Customs said the UK pillar two legislation will be delayed until at least December 2023, while ITR reported on a secret Netflix settlement and an IMF study on VAT cuts.
We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree