AHK Greater Beijing Networking Meeting on China’s new Environmental Protection Tax

July 2017 - China’s Central Government has passed a new environmental protection law, which is entering into force on 1 January 2018. The new tax law will replace the existing fee system for pollutant discharge, which has been in place since 1979. Against this background, on 30 June 2017, the AHK Greater Beijing, on behalf of BMU invited company representatives and experts to a networking meeting with focus on the design of the new law.

The networking meeting started with a presentation by Mr. Ge Chazhong from the Chinese Academy for Environmental Planning (CAEP), on the background and the shape of the new environmental protection law. According to the expert, the law affects all enterprises and public institutions which directly emit taxable pollutants within the national borders or waters of China. However, there are also tax exemptions foreseen. The emissions to be taxed are to be recorded using an Online Monitoring System. In this context, Ge Chazhong stressed the need to improve the data exchange between the Ministry of Environmental Protection (MEP) and the State Tax Administration (STA).

The second presentation by Ms. Iris Pang of PricewaterhouseCoopers (PwC) gave an overview of the framework conditions of the environmental protection tax. The expert underlined the importance for companies to deal with the new law at an early stage, because it would increase the overall real tax burden. Beijing is going to establish one of the highest tax rates. However, Pang stressed the positive aspect that the new tax will be raised at the local level only. Thus, there would be more potential for the granting state subsidies, for instance, to renew plants and thereby reducing emissions.

Carbon dioxide emissions, however, have not been included in the levying list, since they will already be covered by China’s carbon market to be launched on a national scale in autumn 2017.

Further Information

The June issue of the Econet Monitor magazine, which is published by the environment experts at AHK Greater China in Beijing, contains an in-depth article on the networking meeting. The article is available for download here.

Note: The publication is available only in German.