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China Issues Clarification on Taxable Pollutants Regime

The level of Environmental Protection Tax payable with regard to particulate matter in combustion exhausts will be calculated using the same methodology currently applied to soot particles. Certain production facilities, however, will remain tax-exempt, provided their emission levels stay below the government-mandated maximum.

This regulatory clarification came in a recent circular jointly-issued by the Ministry of Finance, the State Administration of Taxation and the Ministry of Ecology and Environment. In addition, the circular carried full details of the taxable pollutants subject to the Environmental Protection Tax, as well as guidance on a number of related matters.

The key points of the circular were as follows:

Taxable Pollutants

Other than pollutant content classifiable as soot particles, asbestos dust, glass wool or carbon black dust, all particulate matter (including standard dust and industrial dust) will be subject to the Environmental Protection Tax at the same level as non-specific dust.

Tax Exemption and Remission

In the case of legally-compliant garbage incineration power plants, refuse landfills, household waste composting plants and household waste treatment plants, their pollutant emissions will be exempt from the Environmental Protection Tax provided that the relevant levels stay below the peak permitted output specified by the presiding central or local government body. Should the level of emissions from any single exhaust outlet be found to exceed the designated maximum then the responsible taxpaying entity will lose its entitlement to Environmental Protection Tax remission.

For further details (in Chinese), please access the following link:

Circular on Taxable Pollutants Subject to Environmental Protection Tax and Other Issues

Content provided by Picture: HKTDC Research
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