Implementing Regulations for the Law of the People's Republic of China on Environmental Protection Tax

Order of the State Council of the People's Republic of China No.693

December 25, 2017

The Implementing Regulations for the Law of the People's Republic of China on Environmental Protection Tax are hereby promulgated and shall take effect as of January 1, 2018.

Li Keqiang, Premier

Implementing Regulations for the Law of the People's Republic of China on Environmental Protection Tax

Chapter I General Provisions

Article 1 The Regulations are developed in accordance with the Law of the People's Republic of China on Environmental Protection Tax (the "Law").

Article 2 The specific scope of other solid waste referred to in the Table of Taxable Items and Amount of Environmental Protection Tax attached to the Law shall be determined in accordance with the procedures specified in Paragraph 2 of Article 6 of the Law.

Article 3 Centralized urban and rural sewage treatment facilities as mentioned in Paragraph 1 of Article 5 and Item 3, Paragraph 1 of Article 12 of the Law refer to the facilities that provide the service of domestic sewage treatment for the public, not including the facilities or places that provide the service of sewage treatment for enterprises, public institutions and other producers and operators in industrial parks, development zones, and other industrial gathering areas, and the sewage treatment facilities or places built by enterprises, public institutions and other producers and operators for their own use.

Article 4 Livestock farms that reach a certain scale as determined by the provincial people's governments and have emission outlets shall pay the environmental protection tax according to the law. Those that are engaged in the comprehensive utilization and harmless disposal of livestock farming waste according to the law do not fall within the scope of directly discharging pollutants into the environment and thus shall not pay the environmental protection tax.

Chapter II Tax Basis

Article 5 The tax basis for taxable solid waste shall be determined according to the emission amount of the solid waste. The solid waste emission amount shall be the balance after the amount of taxable solid waste generated in the current period minus the amount of solid waste stored, disposed of and comprehensively utilized in the current period.
The foregoing amount of solid waste stored or disposed of refers to the amount of solid waste stored or disposed of at the facilities or places that satisfy the national and local environmental protection standards; the amount of solid waste comprehensively utilized refers to the amount of solid waste comprehensively utilized in accordance with the requirements on the comprehensive utilization of resources of the authorities in charge of development and reform, and industry and information technology under the State Council and the national and local environmental protection standards.

Article 6 If a taxpayer falls within any of the following circumstances, the emission amount of solid waste shall be equivalent to the amount of taxable solid waste generated in the current period:
1. illegally dumps taxable solid waste;
2. files a false tax declaration.

Article 7 The tax basis for taxable air pollutants or water pollutants shall be determined according to the pollution equivalent number converted from the emission amount of pollutants.
If a taxpayer falls within any of the following circumstances, the emission amount of pollutants shall be equivalent to the amount of taxable air pollutants or water pollutants generated in the current period:
1. fails to install and use an automatic pollutant monitoring equipment according to the law or connect such automatic pollutant monitoring equipment to the monitoring equipment of the competent environmental protection authority;
2. damages, or moves, changes the automatic pollutant monitoring equipment without authorization;
3. tampers with or forges the monitoring data on pollutants;
4. illegally discharges taxable pollutants by way of emission via concealed conduits, seepage wells, seepage pits, perfusion or dilution, and abnormal operation of facilities for prevention and control of pollutants; or
5. files a false tax declaration.

Article 8 Where taxable pollutants are discharged via two or more emission outlets, the environmental protection tax will be calculated and levied respectively on taxable pollutants discharged via each emission outlet. For taxpayers holding a pollutant discharge license, the emission outlets for pollutants shall be determined in accordance with the emission outlets as specified in the pollutant discharge license.

Article 9 For taxpayers falling within the circumstance as specified in Item 2 of Article 10 of the Law, where the monitoring data acquired by them in their own monitoring of pollutants are in line with the State's relevant provisions and monitoring specifications, such data shall be deemed as the monitoring data issued by a monitoring agency as provided in Item 2 of Article 10 of the Law.

Chapter III Tax Deduction and Exemption

Article 10 The concentration value of taxable air or water pollutants as mentioned in Article 13 of the Law refers to the average value of the hourly average concentration values of taxable air pollutants or the average value of daily average concentration values of taxable water pollutants acquired in automatic monitoring via the automatic pollutant monitoring equipment installed and used by a taxpayer in the current month, or the average concentration value of taxable air or water pollutants acquired by a monitoring agency through each monitoring in the current month.
In the case of reduction of environmental protection tax in accordance with Article 13 of the Law, the hourly average concentration value of taxable air pollutants or the daily average concentration value of taxable water pollutants, and the concentration value of taxable air or water pollutants acquired by a monitoring agency through each monitoring in the current month as mentioned in the preceding paragraph shall not exceed the limits prescribed by the national or local standards for emission.

Article 11 In the case of reduction of environmental protection tax in accordance with Article 13 of the Law, the environmental protection tax shall be calculated respectively by different taxable pollutants discharged from each emission outlet.

Chapter IV Administration of Tax Collection

Article 12 The tax authorities shall perform such duties as accepting environmental protection tax declaration, tax-related information comparison and organizing the payment of tax revenues to the treasury.
Competent environmental protection authorities are responsible for the monitoring and administration of taxable pollutants, and the formulation and improvement of pollutant monitoring standards in accordance with the law.

Article 13 Local people's governments at or above the county level shall strengthen the leadership in the administration of the collection of environmental protection tax, and promptly cooperate on or solve major issues encountered in the administration of the collection of environmental protection tax.

Article 14 The authorities in charge of tax affairs and environmental protection under the State Council shall develop the technical standards for the shared platform for tax-related information, and the specifications on data acquisition, storage, transmission, query and use.

Article 15 Competent environmental protection authorities shall, via the shared platform for tax-related information, deliver the following information acquired in the supervision and administration of environmental protection to tax authorities:
1. basic information of the pollutant emitter such as name, unified social credit code, pollutant emission outlets and types of pollutants emitted;
2. pollutant emission data of the pollutant emitter (including the amount of pollutant emission and concentration values of air pollutants and water pollutants, etc.);
3. the information on the pollutant emitter's emission act in violation of environment-related laws and administrative penalties imposed on it;
4. review opinions requested by the tax authority on the abnormality in the taxpayer's tax declaration data or the taxpayer's failure to file their tax declaration within the prescribed time limit;
5. other information to be delivered as agreed upon with the tax authority.

Article 16 Tax authorities shall, via the shared platform for tax-related information, deliver the following information on environmental protection tax to competent environmental protection authorities:
1. basic information of the taxpayer;
2. tax declaration information;
3. information on tax due to the treasury, tax deductions and exemptions, and tax arrears and risks or doubts;
4. information on the taxpayer's tax-related violations and administrative penalties imposed on it;
5. information on the abnormality in the taxpayer's tax declaration data or the taxpayer's failure to file their tax declaration within the prescribed time limit;
6. other information to be delivered as agreed upon with the competent environmental protection authority.

Article 17 The place where taxable pollutants are emitted as mentioned in Article 17 of the Law refers to:
1. the place where the emission outlet for taxable air and water pollutants is located;
2. the place where solid waste is generated;
3. the place where noise is generated.

Article 18 Where tax authorities have any dispute over the jurisdiction over the collection of tax on pollutants emitted by a taxpayer across different regions, the dispute shall be settled by the parties to the dispute through negotiations in line with the principle of facilitating the administration of tax collection; if the negotiation fails, the dispute shall be submitted to the common tax authority at a higher level for decision.

Article 19 The tax authorities shall identify taxpayers based on the information on pollutant emitters delivered by competent environmental protection authorities.
Where the information delivered by a competent environmental protection authority includes no information on the corresponding taxpayer, the tax authority concerned shall identify the taxpayer when the taxpayer files its declaration of environmental protection tax for the first time, and deliver the relevant information to the competent environmental protection authority simultaneously.

Article 20 Where the competent environmental protection authority finds that the information on the emission of taxable pollutants declared by a taxpayer or the applicable pollutant emission coefficients or material balance method is wrong, it shall inform the tax authority for handling.

Article 21 Where the pollutant emission data declared by a taxpayer is inconsistent with the relevant data delivered by the competent environmental protection authority, the tax basis for taxable pollutants shall be determined according to the data delivered by the competent environmental protection authority.

Article 22 The abnormality in a taxpayer's tax declaration data as mentioned in Paragraph 2 of Article 20 of the Law includes but is not limited to the following circumstances:
1. the emission amount of taxable pollutants declared by the taxpayer in the current period is obviously lower than that in the corresponding period of the previous year, without a justified reason;
2. the emission amount of pollutants per unit of product declared by the taxpayer is obviously lower than that of similar enterprises, without a justified reason.

Article 23 Tax authorities and competent environmental protection authorities shall provide the coaching, training and consulting services in connection with the payment of environmental protection tax for taxpayers free of charge.

Article 24 Tax authorities shall carry out tax inspections concerning the environmental protection tax in accordance with the law, for which competent environmental protection authorities shall provide cooperation.

Article 25 Taxpayers shall properly keep materials relating to monitoring and management of taxable pollutants in accordance with the provisions on the administration of tax collection.

Chapter V Supplementary Provisions

Article 26 The Regulations shall come into force as of January 1, 2018. The Administrative Regulations on the Collection and Use of Pollutant Emission Charges released by the State Council on January 2, 2003 shall be repealed simultaneously.