(Adopted at the 25th Meeting of the Standing Committee of the Twelfth National People’s Congress on December 25, 2016; and amended in accordance with Decision on Amending Law of the People’s Republic of China on the Protection of Wild Animals and Other Fourteen Laws adopted at the Sixth Meeting of the Standing Committee of the Thirteenth National People’s Congress on October 26, 2018)

Contents

Chapter I General Provisions

Chapter II Tax Basis and the Amount of Tax Payable

Chapter III Tax Reduction and Exemption

Chapter IV Collection and Administration

Chapter V Supplementary Provisions 

Chapter I   General Provisions

Article 1 This Law is formulated for the purposes of protecting and improving the environment, reducing pollutant discharges, and promoting ecological civilization construction.

Article 2 The enterprises, public institutions, and other producers and operators that directly discharge taxable pollutants into the environment within the territory of the People’s Republic of China and other sea areas under the jurisdiction of the People’s Republic of China are taxpayers of environmental protection tax, and shall pay environmental protection tax in accordance with the provisions of this Law.

Article 3 For the purpose of this Law, “taxable pollutants” shall refer to the air pollutants, water pollutants, solid wastes and noises as prescribed in the “Table of Taxable Items and Tax Amounts Per Unit of Environmental Protection Tax” and the “Table of Taxable Pollutants and Equivalent Values” attached to this Law.

Article 4 Where an enterprise, public institution, or other producer and operator falls under any of the following circumstances, it shall not be deemed to directly discharge pollutants to the environment, and shall not pay environmental protection tax on the corresponding pollutants:

  (1) It discharges taxable pollutants to a centralized sewage or domestic waste treatment site established in accordance with the law;

  (2) It stores or disposes of solid wastes at any facility or site that meets the national and local environmental protection standards.

Article 5 Centralized urban and rural sewage or domestic waste treatment sites established in accordance with the law that discharge taxable pollutants to the environment in excess of the discharge standards as prescribed by the state or the local area shall pay environmental protection tax.

Enterprises, public institutions, and other producers and operators that store or dispose of solid wastes and do not meet the national and local environmental protection standards shall pay environmental protection tax.

Article 6 Tax items and tax amounts of environmental protection tax shall be governed by the “Table of Taxable Items and Tax Amounts Per Unit of Environmental Protection Tax” attached to this Law.

The determination and adjustment of the specific tax amounts applicable to taxable air pollutants and water pollutants shall be proposed by people’s governments of provinces, autonomous regions and municipalities directly under the central government within the range of the tax amounts as prescribed in the “Table of Taxable Items and Tax Amounts Per Unit of Environmental Protection Tax” attached to this Law, based on the overall consideration to the environmental carrying capacities, status quo of pollutant discharges, and the requirements and goals of economic, social and ecological development, shall be reported to the standing committees of the people’s congresses at the same levels for decision, and shall thereafter be filed with the Standing Committee of the National People’s Congress and the State Council for the record.

Chapter II   Tax Basis and the Amount of Tax Payable

Article 7 The tax basis for taxable pollutants shall be determined by using the following methods:

  (1) The tax basis for taxable air pollutants shall be determined on the basis of the pollution equivalents converted from the quantities of pollutants discharged; 

  (2) The tax basis for taxable water pollutants shall be determined on the basis of the pollution equivalents converted from the quantities of pollutants discharged; 

  (3) The tax basis for taxable solid wastes shall be determined on the basis of the quantities of solid wastes discharged; 

  (4) The tax basis for taxable noises shall be determined on the basis of the decibels in excess of the standards as prescribed by the state.

Article 8 The pollution equivalent of taxable air pollutants and water pollutants shall be calculated by dividing the quantity of the pollutant discharged by the pollution equivalent value of the pollutant. The specific pollution equivalent values of various categories of air pollutants and water pollutants shall be governed by the “Table of Taxable Pollutants and Equivalent Values” attached to this Law.

Article 9 For the air pollutants discharged from each discharge outlet or for which no discharge outlet is established, the first three items of pollutants ranked in descending order of pollution equivalents shall be subject to environmental protection tax.

For the taxable water pollutants discharged from each discharge outlet, the water pollutants of Category I and water pollutants of other categories shall be distinguished in accordance with the “Table of Taxable Pollutants and Equivalent Values” attached to this Law, and be ranked in descending order of pollution equivalents. The first five items of the water pollutants of Category I and the first three items of water pollutants of other categories shall be subject to environmental protection tax.

People’s governments of provinces, autonomous regions or municipalities directly under the central government may, according to the specific needs of reducing the pollutants discharged in local areas, increase the number of taxable items of pollutants discharged from the same discharge outlet, on which environmental protection tax is collected, which shall be reported to the standing committee of the people’s congress at the same level for decision and to the Standing Committee of the National People’s Congress and the State Council for the record.

Article 10 The quantities of taxable air pollutants, water pollutants, or solid wastes discharged and decibels of noises shall be calculated according to the following methods and order:

  (1) The automatic monitoring data on pollutants, where taxpayers install and use pollutant automatic monitoring equipment that complies with the national regulations and monitoring standards; 

  (2) The monitoring data issued by monitoring institutions in compliance with relevant national regulations and monitoring standards, where taxpayers fail to install and use pollutant automatic monitoring equipment;

  (3) The pollution discharging coefficient and material balance method as prescribed by the ecology and environment department of the State Council, where the conditions for monitoring are not satisfied due to the diversity of pollutants discharged or for any other reason;

  (4) The sampling calculation method as prescribed by the ecology and environment departments of people’s governments of the provinces, autonomous regions, or municipalities directly under the central government, where the calculation cannot be made by using the methods as specified in paragraph (1) to (3) of this Article.

Article 11 The amount of environmental protection tax payable shall be calculated by using the following methods:

  (1) The amount of tax payable on taxable air pollutants shall be the pollution equivalent multiplied by the specific applicable tax amount;

  (2) The amount of tax payable on taxable water pollutants shall be the pollution equivalent multiplied by the specific applicable tax amount;

  (3) The amount of tax payable on solid wastes shall be the quantity of solid wastes discharged multiplied by the specific applicable tax amount;

  (4) The amount of tax payable on taxable noises shall be the corresponding specific applicable tax amount of the decibels in excess of the standards as prescribed by the state.

Chapter III   Tax Reduction and Exemption

Article 12 Under the following circumstances, environmental protection tax shall be temporarily exempted:

  (1) Where taxable pollutants are discharged from agricultural production (excluding large-scale breeding);

  (2) Where taxable pollutants are discharged from motor vehicles, railway locomotives, non-road mobile machinery, vessels, aircrafts and other mobile pollution sources;

  (3) Where the corresponding taxable pollutants which do not exceed the discharge standards as prescribed by the state and local areas are discharged from centralized urban and rural sewage and domestic waste treatment sites established in accordance with the law;

  (4) Where the solid wastes comprehensively utilized by taxpayers meet the national and local environmental protection standards;

  (5) Other circumstances under which tax is exempted as approved by the State Council.

The provisions on tax exemption in paragraph (5) of this Article shall be reported by the State Council to the Standing Committee of the National People’s Congress for the record.

Article 13 Where the concentration of the taxable air pollutants or water pollutants discharged by a taxpayer is lower than 30 percent of the pollutant discharge standards as prescribed by the state or the local area, the environmental protection tax thereon shall be collected at a reduced rate of 75 percent. Where the concentration of the taxable air pollutants or water pollutants discharged by a taxpayer is lower than 50 percent of the pollutant discharge standards as prescribed by the state or the local area, the environmental protection tax thereon shall be collected at a reduced rate of 50 percent.

Chapter IV   Collection and Administration

Article 14 Environmental protection tax shall be collected and administered by tax authorities in accordance with the relevant provisions of Tax Collection and Administration Law of the People’s Republic of China and this Law.

Ecology and environment departments shall take charge of the monitoring and administration of pollutants in accordance with the provisions of this Law and relevant laws and regulations on environmental protection.

Local people’s governments at the county level and above shall establish a work mechanism featuring division of functions and coordination among tax authorities, ecology and environment departments and other relevant departments, strengthen the collection and administration of environmental protection tax, and guarantee that taxes are turned over to the State treasury in full amount in a timely manner.

Article 15 Ecology and environment departments and tax authorities shall establish tax-related information sharing platforms and work coordination mechanisms.

Ecology and environment departments shall provide the pollutant discharging entities’ relevant information on environmental protection to tax authorities on a regular basis, such as pollutant discharge licenses, pollutant discharge data, and violations against environmental laws and administrative penalties imposed thereon.

Tax authorities shall provide the taxpayers’ tax-related information on environmental protection to ecology and environment departments on a regular basis, such as tax returns filing, payment of taxes to the State treasury, amount of tax reduced and exempted, tax arrears, and potential risks.

Article 16 The time when the tax obligation of a taxpayer occurs shall be the date when the taxpayer discharges taxable pollutants.

Article 17 Taxpayers shall file tax returns with and pay environmental protection tax to the tax authorities at the places where taxable pollutants are discharged.

Article 18 Environmental protection tax shall be calculated on a monthly basis, while the tax return shall be filed and the payment shall be made on a quarterly basis. Where the calculation and payment cannot be made on a regular basis, the tax return may be filed and the payment may be made on a transaction-by-transaction basis.

When filing tax returns and paying taxes, taxpayers shall submit to tax authorities the categories and quantities of the taxable pollutants discharged, the concentrations of the air pollutants and water pollutants discharged, and other tax-related documents required by tax authorities according to the actual needs.

Article 19 Taxpayers that file tax returns and pay taxes on a quarterly basis shall, file tax returns with and pay taxes to tax authorities within 15 days after the end of each quarter. Taxpayers that file tax returns and pay taxes on a transaction-by-transaction basis shall, file tax returns with and pay taxes to tax authorities within 15 days after the date when the tax obligation occurs.

Taxpayers shall truthfully file tax returns in accordance with the law, and be responsible for the authenticity and completeness of the tax returns.

Article 20 Tax authorities shall compare the data and documents concerning tax filing with relevant data and documents provided by ecology and environment departments.

Where tax authorities find that tax filing data and documents provided by taxpayers are abnormal or taxpayers fail to file tax returns within the prescribed time limit, they may request ecology and environment departments to conduct a review. Ecology and environment departments shall, within 15 days after the date of receiving the data and documents from tax authorities, issue their review opinions to tax authorities. Tax authorities shall adjust taxpayers’ amounts of tax payable in accordance with the data and documents reviewed by ecology and environment departments.

Article 21 Where the amounts of pollutant discharged are assessed, determined and calculated in accordance with the provisions of paragraph 4 of Article 10 of this Law, tax authorities shall, in conjunction with ecology and environment departments, assess and determine the categories, quantities and amounts of tax payable of pollutants discharged.

Article 22 The specific measures for the environmental protection tax filing and payment by taxpayers engaging in ocean engineering for their discharges of taxable air pollutants, water pollutants or solid wastes to the sea areas under the jurisdiction of the People’s Republic of China shall be prescribed by the taxation department of the State Council in conjunction with the ecology and environment departments of the State Council.

Article 23 Taxpayers, tax authorities, and ecology and environment departments as well as their staff members that violate the provisions of this Law shall be held legally liable in accordance with Tax Collection and Administration Law of the People’s Republic of China, Environmental Protection Law of the People’s Republic of China and other relevant laws and regulations.

Article 24 People’s governments at all levels shall encourage taxpayers to increase investments in environmental protection construction, and provide financial and policy support for taxpayers’ investments in pollutant automatic monitoring equipment.

Chapter V   Supplementary Provisions

Article 25 For the purpose of this Law, the meanings of the following terms are:

  (1) “Pollution equivalent” means the comprehensive indicator or unit of measurement used to measure the environmental pollution caused by different pollutants according to the degree of damages of pollutants or pollutant discharging activities to the environment and the technical and economic feasibility of the treatment thereof. The degree of pollution caused by different pollutants with the same pollution equivalent discharged via the same medium shall be basically the same.

  (2) “Pollution discharging coefficient” means the statistical average of the quantities of pollutants that shall be discharged by producing a unit of the product under normal technical, economic and management conditions.

  (3) “Material balance” means a method for calculating the raw materials used, products produced and wastes generated in the process of production under the law of conservation of mass.

Article 26 Enterprises, public institutions and other producers and operators that directly discharge taxable pollutants to the environment shall, in addition to paying environmental protection tax in accordance with the provisions of this Law, assume responsibilities for the damage caused thereby in accordance with the law.

Article 27 From the date when this Law enters into force, environmental protection tax shall be collected in accordance with the provisions of this Law, and pollutant discharge fees shall not be collected any more.

Article 28 This Law shall enter into force from January 1, 2018.

Annex 1

Table of Taxable Items and Tax Amounts Per Unit of Environmental Protection Tax

Annex 2

Table of Taxable Pollutants and Equivalent Values

(1) Pollution Equivalent Values of Water Pollutants of Category I  

(2) Pollution Equivalent Values of Water Pollutants of Category II

(3) Pollution Equivalent Values of Water Pollutants such as pH Value, Chromaticity, Coliform Count and Residual Chlorine

(4) Pollution Equivalent Values of Water Pollutants for Livestock and Poultry Farms, Small Enterprises and the Tertiary Industry

(This table is exclusively used to calculate the pollution equivalent values of water pollutants for livestock and poultry farms, small enterprises and the tertiary industry, where actual monitoring or material balance is not feasible)

(5) Pollution Equivalent Values of Air Pollutants