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Environment Protection Tax Law

Starting from 1 January 2018, China levies taxes on industrial emissions and pollution. The Environmental Protection Tax Law which got approved by the Session of 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.

 

The Environmental Protection Tax Law will affect the so-called “taxable pollutants” such as atmosphere pollutants, water pollutants, solid wastes and industrial noise. Due to the different damage the “taxable pollutants” provide they have been divided in each of their own category, which consists of subcategories with tax rates per measurable unit. The tax rates also differ depending on where the production takes place, for example, regions which are amongst the most polluted places, such as Beijing, Hebei, and Tianjin, have higher tax rates compared to less polluted places.

 

For example, the tax rates for atmosphere pollutants differ between 1.2 and 12 RMB per pollution equivalent, depending on which region the firm is established in. For water pollutants, the range is from 1.4 to 14 RMB. However, taxes on solid waste the same in every region.

 

The tax rates for industrial noise fundamentally differs from the other categories, as tax-rates increase drastically with the sound pressure level measured in decibel (dB). For example, the tax rate for 1-3 dB above standard is 350 RMB per month, whereas every noise that reaches at least 16 dB above standard will cost the emitter 11200 RMB per month.  (the original list in Chinese can be accessed here – the English translation is here)

 

The effects of the new law cause additional costs for firms in China, but might also be an advantage for the firms, which have already modernized their installations or offer cleaner alternatives.

 

As written in Art. 24 of the Environmental Protection Tax Law government authorities at all levels are encouraged to devise policies and incentives that promote green investment and the use of monitoring equipment.

 

 

What can ECOVIS Beijing Tax Consultants do? 

 

Our tax consultants can evaluate your situation and offer the following services:

 

  • Tax Projection
  • Tax Optimization Plan
  • Application for Government Subsidies and Support

 


  

ECOVIS Beijing is a Sino-German consultancy focusing on accounting, audit, tax, legal, and FDI advisory. For more information or questions on withholding income tax in China or our tax services, please contact This email address is being protected from spambots. You need JavaScript enabled to view it.

 

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Richard Hoffmann

Richard Hoffmann is a partner at ECOVIS Beijing China. Richard obtained an honors degree in law and worked in Germany, the United States, and China for various prestigious law firms prior to joining ECOVIS. In addition to being a member of the board of ECOVIS International, he is Supervisor for the China business of a respected German company and shares his extensive knowledge to students by teaching commercial law in China at SRH Hochschule Heidelberg. He has published more than fifty articles in international magazines, frequently speaks at high profile events in China and abroad and is often invited as a legal expert by international TV stations. Contact: This email address is being protected from spambots. You need JavaScript enabled to view it.

Ecovis Beijing is the trusted tax and legal advisor to several embassies and official institutions in China. It specializes in mid-sized international companies and is focused on tax & legal advisory, accounting and auditing. If you’re interested in finding out more about tax and legal, don’t hesitate to sign up for our Newsletter, give us a call +86 (10) 6561 6609 or contact us directly via This email address is being protected from spambots. You need JavaScript enabled to view it.
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