Guidelines on Preferential Tax and Fee Policies Supporting Green Development
“Lucid waters and lush mountains are invaluable assets.” Saving resources and protecting the environment are the basic national policies of China, which are related to people’s welfare and the future of the country and the nation. To help the overall green transformation of economic and social development and implement the sustainable development strategy, China has implemented 56 preferential tax and fee policies to boost green development by supporting environmental protection, promoting energy conservation and environmental protection, encouraging comprehensive utilization of resources, and promoting the development of low-carbon industries.
I. Supporting environmental protection
In order to reduce emissions of major pollutants and effectively control environmental risks, the government takes the initiative in the construction of ecological and environmental protection projects, promotes enterprises to accelerate the upgrading and reconstruction of environmental protection equipment, promotes third-party management of environmental pollution, and optimizes the development of the natural ecological environment, including:
(I) Tax incentives for environmental protection
1. Regular reduction of and exemption from corporate income tax on income from engaging in eligible environmental protection
2. Corporate income tax credit for a certain percentage of the investment in special equipment for environmental protection
3. Collection of corporate income tax at a reduced rate of 15% from third-party enterprises engaged in pollution prevention and control
4. Exemption from urban land use tax on public green land outside enterprises’ factory area
(II) Tax incentives for soil and water conservation
5. Exemption from soil and water conservation compensation fees for constructing municipal ecological and environmental protection infrastructure projects
6. Exemption from soil and water conservation compensation fees for soil erosion management activities in accordance with soil and water conservation planning
II. Promoting energy conservation and environmental protection
To strengthen environmental management and governance, significantly reduce the intensity of pollutant emissions, reduce the impact of industrialization and urbanization on the ecological environment, upgrade the living environment, and strive to improve environmental quality, a series of preferential tax policies are being implemented in the aspects of promoting contract energy management projects, safeguarding residential heating, promoting the green transformation of battery manufacturing, building materials and other industries, facilitating energy and water conservation and environmental protection, supporting the use of new energy vehicles and vessels, and encouraging centralized and safe disposal of pollutants, which has constantly improved the quality of air and water environment, and effectively controlled soil pollution, including:
(I) Tax incentives for contract energy management projects
7. Temporary exemption from VAT (on goods) for contract energy management projects
8. Temporary exemption from VAT (on services) for contract energy management projects
9. Regular reduction of and exemption from corporate income tax on the income from the contract energy management projects implemented by the energy-saving service companies
(II) Tax incentives for heat supply enterprises
10. Exemption from VAT on heating fees obtained by heat supply enterprises from individual residents
11. Exemption from property tax on the plants used by heat supply enterprises that supply heat to residents
12. Exemption from urban land use tax on the land used by heat supply enterprises that supply heat to residents
(III) Tax incentives for energy-saving and environmentally friendly batteries and paints
13. Exemption from consumption tax for energy-saving and environmentally friendly batteries
14. Exemption from consumption tax for energy-saving and environmentally friendly paints
(IV) Tax incentives for energy and water conservation
15. Exemption from VAT for drip irrigation products
16. Regular reduction of and exemption from corporate income tax on the income from eligible energy and water conservation projects
17. Corporate income tax credit based on a certain percentage of investment amount for purchase of special equipment for energy and water conservation
(V) Tax incentives for new energy vehicles and vessels
18. Exemption from vehicle tax for new energy vehicles and vessels
19. 50% reduction in vehicle tax for energy-saving vehicles
20. Exemption from vehicle purchase tax for new energy vehicles
(VI) Tax incentives for water resources conservation
21. Exemption from water resource tax for the use of reclaimed water from sewage treatment
22. Exemption from water resource tax for water used for pumped storage power generation
23. Exemption from water resource tax for rejection through the closed pipeline of oil recovery drainage after separation and purification
(VII) Tax incentives for the reduction of pollutant emission
24. Exemption from environmental protection tax for emission of pollutants from agricultural production
25. Exemption from environmental protection tax for pollutant discharge from urban and rural places for centralized treatment of sewage and domestic waste
26. Reduction of environmental protection tax for emission of taxable air pollutants or water pollutants with a concentration value lower than the national and local pollutant emission standards
III. Encouraging the comprehensive utilization of resources
Carrying out comprehensive utilization of resources and improving the efficiency of resource utilization are important contents of promoting green low-carbon circular development and ensuring the security of resource supply, and have important practical significance for alleviating the constraints of resource environment on economic and social development. China continues to increase the support of tax incentives for the comprehensive utilization of resources, strengthens the policy support for comprehensive utilization of waste, sewage and garbage treatment, efficient utilization of mineral resources, water conservancy construction and other aspects, and strives to improve the efficiency of resource utilization and promote the overall green transformation of economic and social development, including:
(I) Tax incentives for comprehensive utilization of resources
27. Immediate refund of VAT levied on new wall materials
28. Immediate refund of VAT levied on products and services for comprehensive utilization of resources
29. Reduction of income in the calculation of taxable income from the production of products through comprehensive utilization of resources
30. Exemption from consumption tax on pure biodiesel produced from waste animal and vegetable oils
31. Exemption from consumption tax on industrial oil produced from waste mineral oil
32. Exemption from deed tax on bearing the barren hills, wastelands, beaches for agriculture, forestry, livestock, fisheries production
33. Exemption from environmental protection tax for comprehensive utilization of solid waste
(II) Tax incentives for sewage treatment
34. Immediate refund of VAT levied or exemption from VAT on reclaimed water produced by wastewater treatment plants
35. Immediate refund of VAT levied or exemption from VAT on labor services for waste treatment, sludge treatment and disposal
36. Immediate refund of VAT levied or exemption from VAT on labor services for wastewater treatment
37. Exemption from VAT on sewage treatment fees
(III) Tax incentives for mineral resources mining
38. Exemption from resource tax on coal-forming (seam) gas extracted by coal mining enterprises
39. Reduction of resource tax on mineral products extracted from mines in decline
40. Reduction of resource tax on coal replaced by infill mining
41. Reduction of and exemption from resource tax on mining of symbiotic and co-associated ores
42. Reduction of and exemption from resource tax on mining of low-grade ore
43. Reduction of and exemption from resource tax on mining of tailings
44. Reduction of resource tax on shale gas
(IV) Tax benefits for water conservancy project construction
45. Exemption from urban maintenance and construction tax on the construction fund of national major water conservancy projects
46. Exemption from the educational surcharge on the construction fund of national major water conservancy projects
47. Reduction of the arable land occupation tax on the occupation of arable land by water conservancy projects
IV. Promoting the development of low-carbon industries
Activities related to energy production and consumption are the most important source of carbon dioxide emissions, and vigorously promoting carbon emission reduction in the energy sector is an important measure to do a good job in peak carbon dioxide emissions and carbon neutrality and accelerate the construction of a modern energy system. By increasing the policy support for the development and utilization of solar energy, wind energy, water energy, nuclear energy and other clean energy, we can provide a guarantee for the scientific and orderly promotion of the timely achievement of the “carbon peak and carbon neutrality” goals and the construction of a modern economic system, including:
(I) Tax benefits for CDM Fund and CDM project
48. Exemption from corporate income tax on income from China Clean Development Mechanism Fund
49. Reduction of and exemption from corporate income tax on the implementation of the Clean Development Mechanism projects
(II) Tax incentives for wind, hydro, photovoltaic power generation and nuclear power industry
50. Immediate refund of VAT levied on wind power generation
51. Exemption from urban land use tax on partial land used for hydroelectric power plants
52. Exemption from the national major water conservancy project construction fund on the electricity self-generated for self-use in distributed photovoltaic power generation
53. Exemption from renewable energy tariff surcharge on the electricity self-generated for self-use in distributed photovoltaic power generation
54. Exemption from support funds in the later stage of people’s relocation for large and medium-sized reservoirs on the electricity self-generated for self-use in distributed photovoltaic power generation
55. Exemption from loan repayment funds for rural power grids on the electricity self-generated for self-use in distributed photovoltaic power generation
56. Exemption from urban land use tax on partial land used for nuclear power plants
