Recently, the Ministry of Finance ("MOF") and the State Administration of Taxation ("SAT") have issued the Implementing Regulations for the Law of the People's Republic of China on Environmental Protection Tax (Draft for Comment) (the "Draft for Comment") to solicit comments from the public before July 26, 2017.
Major contents in the Draft for Comment include particulars on taxpayers, tax objects, tax basis, tax deduction and exemption, and administration of tax collection. In particular, the Draft for Comment details particular provisions about taxpayers, based on those stipulated in the Law on Environmental Protection Tax, stating that other producers and operators obligated to pay the environmental protection tax refer to privately-owned businesses and other organizations. Meanwhile, the Draft for Comment gives interpretations and lays down detailed provisions on four groups of environmental protection tax objects, namely, the air pollutants, water pollutants, solid wastes and noise, as prescribed in the Taxation Law. Furthermore, in terms of four methods specified in the Taxation Law to compute the amount of taxable pollutants discharged, the Draft for Comment expatiates upon such four methods under specific circumstances, and further clarifies which circumstances are eligible for tax exemption and deduction as mentioned in the Taxation Law.