Three authorities including the Ministry of Finance ("MOF") have recently issued the Circular on Canceling the Tax-free Import Quota for Offshore Petroleum (Natural Gas) Exploitation Projects and the Circular on Canceling the Tax-free Import Quota for Petroleum (Natural Gas) Exploitation Projects in the Designated Onshore Areas (the "Circular"), both of which shall go into effect immediately from the date of issuance.
The Circular reads that the term "within the prescribed tax-free import quota", as mentioned twice in Article 2 of the Circular of the Ministry of Finance, the General Administration of Customs and the State Taxation Administration on Tax Policies for Imported Goods and Materials for Exploiting Petroleum (Natural Gas) in the Designated Onshore Areas within the Territory of China during the 13th Five-Year Plan Period, is removed. In addition, the provision reading "be subject to both the List of Tax-free Goods and Materials and the annual tax-free import quota", as stated in Article 3 thereof, is revised to read "be subject to the List of Tax-free Goods and Materials". The entity chiefly in charge of a project shall truthfully fill out and issue the Confirmation Form on a Petroleum (Natural Gas) Project in China's Designated Onshore Area and Its Imported Goods and Materials. Moreover, the Circular incorporates changes to Article 4, Article 5 and some contents of Annex 2.