Ministry of Finance and State Administration of Taxation, Circular on the Comprehensive Implementation of the Resource Tax Reform

The people's government of a province, autonomous region or municipality directly under the central government may, in light of the realities in its region and based on the development and use of resources such as forests, grasslands and tidelands make specific plans or proposals for the levy of resource tax and implement the same after approval by the State Council (Article 2(1)).

Tax on the 21 resource items listed by name in the Schedule of Resource Tax Items and Tax Rate Ranges and other metal ores not listed by name shall be levied on an ad valorem basis, including iron ore, gold ore, copper ore, bauxite, lead-zinc ore, kaolin, fluorite, phosphate ore, potassium chloride, coal bed methane (coal-formed gas) and sea salt (Article 2(2)).

While implementing the reform of levying resource tax on an ad valorem basis, the mineral resource compensation fee rate for all resource items will be reduced to zero, collection of contributions to the price adjustment fund will be halted and the various fee and fund items established in violation of regulations by local regions in respect of mineral resources will be banned (Article 2(3)).

With respect to qualified mineral resources mined by the backfill method, resource tax is reduced by 50%; with respect to qualified mineral resources mined from depleted mines, resource tax is reduced by 30% (Article 2(5)).

Related legislation: PRC Tentative Regulations on Resource Tax (Revised)

Issued: May 9 2016

Effective: July 1 2016

Main contents: On the basis of the implementation on coal, crude oil, and natural gas of the reform of levy on an ad valorem basis, the reform shall be comprehensively implemented for other mineral resources. The levy of resource tax on natural resources such as water, forests, grasslands and tidelands shall gradually commence (Article 1(3)).

Hebei Province will launch a pilot project to levy a water resource tax by switching from a water resource fee to a water resource tax, incorporating surface water and groundwater into the levy scope and levying the tax on a non-ad valorem basis. It will appropriately increase the tax rate on high water consuming industries, plan-exceeding water use and in areas that excessively extract groundwater. The existing burden level for normal production and domestic water use will remain unchanged.

The people's government of a province, autonomous region or municipality directly under the central government may, in light of the realities in its region and based on the development and use of resources such as forests, grasslands and tidelands make specific plans or proposals for the levy of resource tax and implement the same after approval by the State Council (Article 2(1)).

Tax on the 21 resource items listed by name in the Schedule of Resource Tax Items and Tax Rate Ranges and other metal ores not listed by name shall be levied on an ad valorem basis, including iron ore, gold ore, copper ore, bauxite, lead-zinc ore, kaolin, fluorite, phosphate ore, potassium chloride, coal bed methane (coal-formed gas) and sea salt (Article 2(2)).

While implementing the reform of levying resource tax on an ad valorem basis, the mineral resource compensation fee rate for all resource items will be reduced to zero, collection of contributions to the price adjustment fund will be halted and the various fee and fund items established in violation of regulations by local regions in respect of mineral resources will be banned (Article 2(3)).

With respect to qualified mineral resources mined by the backfill method, resource tax is reduced by 50%; with respect to qualified mineral resources mined from depleted mines, resource tax is reduced by 30% (Article 2(5)).

Related legislation: PRC Tentative Regulations on Resource Tax (Revised)