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China Environmental Protection Tax

Updated:2018-4-27 15:35:54    Source:www.tannet-group.comViews:196

China environmental protection tax for businesses that directly discharge pollutants into the environment will be filed from April, 2018. This new tax law which came into effect in the early of 2018 is not designed to put yet another burden on manufacturing and industrial companies. Rather, the environmental protection tax is intended to be a replacement for China’s pollution fee.

Brief Introduction to Environmental Protection Tax in China
Starting from 1 January 2018, China levies taxes on industrial emissions and pollution. The Environmental Protection Tax Law which got approved by the Standing Committee on 25 of December 2016 is part of China’s 13th Five-Year Plan, which considers environmental protection as one of its key goals.

This is China's first tax clearly designed for environmental protection, which will help establish a "green" financial and taxation system and promote pollution control and treatment of pollutants. The introduction of the tax called an end to the "pollutant discharge fee," which China had been collecting for nearly 40 years.

Filing the Environmental Protection Tax
The environmental protection tax is levied only upon entities which directly discharge pollutants into the environment; individuals are not subject to this tax. The tax rate, subjects, and coverage are roughly the same as under the pollution fee regime. However, affected enterprises and industries widely anticipate a rise in their production costs due to this new tax and stricter enforcement. Such tax requires those liable to file quarterly, and the first environment tax declaration period starts on April 1 this year.

Specifically, environmental protection authorities shall provide the tax authorities with all data on waste-discharging enterprises (EPT taxpayers), including their licenses, past violation of environmental protection regulations, and past pollutant discharge data.

The tax authorities, on the other hand, will timely inform environmental protection authorities of the tax administration status of EPT taxpayers which directly discharge pollutants into the environment, and any discrepancy between data declared by these enterprises and the data environmental protection authorities provided on the same taxpayer.

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