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Online CBA: What are the Requirements of the Incoming Environmental Protection Tax Law and What are the Tax Liabilities that are Likely to Ensue?

Photo: Environmental Protection Tax
Photo: Environmental Protection Tax

Q: What are the requirements of the incoming Environmental Protection Tax Law and what are the tax liabilities that are likely to ensue?

A: China’s Environmental Protection Tax Law will come into force as of 1 January 2018. From that date onwards, any business or individual found to have discharged taxable pollutants into the environment will be obliged to pay the requisite Environmental Protection Tax, which replaces and supersedes the Pollution Discharge Fee.

The exact sum to be levied is detailed in the Table of Taxable Items and the Rate of the Environmental Protection Tax:

  • Air pollutants: RMB1.2-RMB12 per pollutant equivalent value
  • Water pollutants: RMB1.4-RMB14 per pollutant equivalent value
  • Solid waste: RMB5-RMB1,000 per ton
  • Noise: RMB350-RMB11,200 per month

Pollutant equivalent values for taxable air pollutants include the following:

  • 44 air pollutants, including sulphur dioxide, carbon monoxide, asbestos dust and styrene

Pollutant equivalent values for taxable water pollutants include the following:

  • 10 water pollutants (Category I), including total mercury, total cadmium, total chromium, total lead and total silver
  • 61 water pollutants (Category II), including suspended solids, fluorides and benzene
  • pH value, colour, number of coliform groups, and amount of residual chlorine of water pollutants
  • Water pollutants discharged by polluters, such as catering and entertainment establishments, small businesses, the livestock husbandry industry, and hospitals

For further details, please refer to the following:

Environmental Protection Tax Law Set for 2018 Implementation Following End of Public Consultation

New Law Levies Tax Based on Pollutant Volume

Content provided by Picture: HKTDC Research