Effective Date: December 1, 2024
Issuing Authorities: Ministry of Finance (MOF), State Administration of Taxation (SAT), and Ministry of Water Resources (MWR)
China has announced a pilot reform of the Water Resource Tax (WRT) to promote sustainable water management. These reforms aim to strengthen conservation and improve water resource efficiency across the country. Key details include:
Scope of Taxation in China
Organisations and individuals in China extracting surface or groundwater are subject to the WRT. Non-conventional sources, such as rainwater and seawater, are excluded from this reform.
Exemptions for Water Use in China
Exemptions apply to specific uses, including small-scale agricultural needs, emergency extractions for public safety, and water used by rural communities.
Tax Calculation and Rates in China
Tax is calculated based on the volume of water extracted, with higher rates applied to groundwater and areas of overuse. Regions across China may implement customised rates reflecting local water conditions.
Incentives for Water Efficiency in China
Businesses meeting advanced national water efficiency standards are eligible for a 20% tax reduction, promoting sustainable industrial practices throughout China.
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