(Passed at the 25th meeting of the Standing Committee of the 12th National People's Congress on December 25, 2016)
Table of Contents
Chapter 1 General Provisions
Chapter 2 Tax Basis and Tax Payable
Chapter 3 Tax Reductions and Exemptions
Chapter 4 Tax Collection Management
Chapter 5: Supplementary Provisions
Chapter 1 General Provisions
Article 1: This law is formulated in order to protect and improve the environment, reduce pollutant emissions, and promote the construction of ecological civilization.
Article 2 In the territory of the People's Republic of China and other sea areas under the jurisdiction of the People's Republic of China, enterprises, institutions, and other producers and operators that directly discharge taxable pollutants into the environment are taxpayers of the environmental protection tax and shall pay the environmental protection tax in accordance with the provisions of this Law.
Article 3 The taxable pollutants referred to in this Law mean the air pollutants, water pollutants, solid wastes, and noise specified in the 'Environmental Protection Tax Item and Tax Rate Table' and the 'Table of Taxable Pollutants and Equivalent Values' attached to this Law.
Article 4: In any of the following circumstances, it shall not be considered as directly discharging pollutants into the environment, and the corresponding environmental protection tax for the pollutants shall not be paid:
(1) Enterprises, public institutions, and other producers and operators discharging taxable pollutants into legally established centralized sewage treatment and centralized domestic waste treatment facilities;
(2) Enterprises, institutions, and other producers or operators storing or disposing of solid waste in facilities or places that meet national and local environmental protection standards.
Article 5: Where urban and rural centralized sewage treatment facilities and centralized domestic waste treatment sites established in accordance with the law discharge taxable pollutants into the environment in excess of national and local prescribed emission standards, an environmental protection tax shall be paid.
Enterprises, institutions, and other producers and operators who store or dispose of solid waste that do not meet national and local environmental protection standards shall pay environmental protection taxes.
Article 6 The tax items and tax amounts of the environmental protection tax shall be implemented in accordance with the 'Table of Environmental Protection Tax Items and Tax Amounts' attached to this Law.
The specific applicable tax rates for taxable air pollutants and water pollutants shall be determined and adjusted by the people's governments of provinces, autonomous regions, and municipalities directly under the Central Government, who shall take into overall consideration the environmental carrying capacity of their regions, the current status of pollutant emissions, and the requirements of economic, social, and ecological development goals. The proposed rates shall be within the range specified in the 'Table of Environmental Protection Tax Items and Tax Rates' attached to this Law, submitted to the standing committee of the people's congress at the same level for decision, and filed with the Standing Committee of the National People's Congress and the State Council.
Chapter 2 Tax Basis and Tax Payable
Article 7 The tax basis for taxable pollutants shall be determined according to the following methods:
(1) Taxable air pollutants are determined based on the pollution equivalent calculated from the amount of pollutant emissions;
(2) Taxable water pollutants are determined according to the pollution equivalent calculated based on the amount of pollutant discharged;
(3) Taxable solid waste is determined according to the amount of solid waste discharged;
(4) Taxable noise is determined according to the number of decibels exceeding the national standard.
Article 8 The pollution equivalent of taxable air pollutants and water pollutants shall be calculated by dividing the emission of the pollutant by its pollution equivalent value. The specific pollution equivalent values for each taxable air pollutant and water pollutant shall be implemented in accordance with the "Table of Taxable Pollutants and Equivalent Values" attached to this Law.
Article 9: For each emission outlet or taxable air pollutant without an emission outlet, the environmental protection tax shall be levied on the top three pollutants ranked in descending order according to the pollution equivalent.
For taxable water pollutants from each discharge outlet, according to the "Table of Taxable Pollutants and Equivalent Values" attached to this law, distinguish between Category I water pollutants and other water pollutants, and rank them from highest to lowest according to pollution equivalents. Environmental protection tax is levied on the top five Category I water pollutants and on the top three other water pollutants.
The people's governments of provinces, autonomous regions, and municipalities directly under the central government may increase the number of taxable pollutants for the environmental protection tax collected from the same discharge outlet based on the special needs of pollutant reduction in their regions, subject to the decision of the standing committee of the people's congress at the same level, and shall report to the Standing Committee of the National People's Congress and the State Council for record.
Article 10 The amounts of taxable air pollutants, water pollutants, solid waste discharged, and the decibel levels of noise shall be calculated according to the following methods and sequence:
(1) If the taxpayer installs and uses pollutant automatic monitoring equipment that meets national regulations and monitoring standards, it shall be calculated based on the pollutant automatic monitoring data;
(2) If the taxpayer has not installed or used automatic pollutant monitoring equipment, the calculation shall be based on the monitoring data issued by the monitoring agency that complies with national regulations and monitoring standards;
(3) For those who do not have monitoring conditions due to reasons such as the large variety of pollutants discharged, the calculation shall be made according to the discharge coefficients and material balance methods stipulated by the environmental protection authorities of the State Council;
(4) If it cannot be calculated according to the methods stipulated in items 1 to 3 of this article, it shall be determined and calculated according to the sampling measurement methods prescribed by the environmental protection authorities of the people's governments of provinces, autonomous regions, and municipalities directly under the Central Government.
Article 11 The amount of environmental protection tax payable shall be calculated in accordance with the following methods:
(1) The taxable amount for taxable air pollutants is calculated by multiplying the pollution equivalent by the specific applicable tax rate;
(2) The taxable amount of taxable water pollutants is calculated by multiplying the pollution equivalent by the specifically applicable tax rate;
(3) The taxable amount for taxable solid waste is the amount of solid waste discharged multiplied by the specifically applicable tax rate;
(4) The taxable amount for taxable noise is the specific applicable tax amount corresponding to the number of decibels exceeding the national standard.
Chapter 3 Tax Reductions and Exemptions
Article 12 In the following circumstances, the environmental protection tax shall be temporarily exempted:
(1) Emissions of taxable pollutants from agricultural production (excluding large-scale livestock farming);
(2) Motor vehicles, railway locomotives, non-road mobile machinery, ships, and aircraft, and other mobile pollution sources emitting taxable pollutants;
(3) The discharge of corresponding taxable pollutants from urban and rural centralized sewage treatment and centralized domestic waste treatment facilities established according to the law does not exceed the emission standards stipulated by national and local regulations;
(4) Solid waste comprehensively utilized by taxpayers that meets national and local environmental protection standards;
(5) Other situations in which the State Council approves tax exemption.
The tax exemption provision in Item 5 of the preceding paragraph shall be filed with the Standing Committee of the National People's Congress by the State Council.
Article 13 If the concentration of taxable air pollutants or water pollutants emitted by a taxpayer is 30% below the national and local pollutant emission standards, the environmental protection tax shall be levied at 75% of the standard rate. If the concentration of taxable air pollutants or water pollutants emitted by a taxpayer is 50% below the national and local pollutant emission standards, the environmental protection tax shall be levied at 50% of the standard rate.
Chapter 4 Tax Collection Management
Article 14 Environmental protection tax shall be collected and administered by the tax authorities in accordance with the 'Tax Collection and Administration Law of the People's Republic of China' and the relevant provisions of this Law.
The environmental protection authorities are responsible for the monitoring and management of pollutants in accordance with this Law and relevant environmental protection laws and regulations.
People's governments at or above the county level shall establish a work mechanism for division of labor and coordination among tax authorities, environmental protection departments, and other relevant units, strengthen the administration of environmental protection tax collection, and ensure that tax revenues are deposited in full and on time.
Article 15 The environmental protection authorities and tax authorities shall establish a tax-related information sharing platform and a work coordination mechanism.
The environmental protection authority shall regularly provide the tax authorities with environmental protection-related information of pollution discharge units, including their pollution discharge permits, pollutant emission data, environmental violations, and instances of administrative penalties.
The tax authorities shall regularly submit tax-related information related to environmental protection tax, such as taxpayers' tax declarations, tax payments, tax reductions and exemptions, arrears, and risk concerns, to the competent environmental protection department.
Article 16 The time when the tax obligation arises is the day on which the taxpayer discharges taxable pollutants.
Article 17 Taxpayers shall declare and pay the environmental protection tax to the tax authority of the location where taxable pollutants are discharged.
Article 18 Environmental protection tax is calculated on a monthly basis and declared and paid quarterly. If it cannot be calculated and paid according to a fixed period, it may be declared and paid per occurrence.
When taxpayers declare and pay taxes, they shall submit to the tax authorities the types and quantities of taxable pollutants discharged, the concentration values of air pollutants and water pollutants, as well as other tax-related materials that the tax authorities require taxpayers to submit according to actual needs.
Article 19 If a taxpayer declares and pays taxes on a quarterly basis, they shall, within fifteen days from the end of the quarter, handle the tax declaration and pay the taxes to the tax authorities. If a taxpayer declares and pays taxes on a per-occurrence basis, they shall, within fifteen days from the date the tax obligation arises, handle the tax declaration and pay the taxes to the tax authorities.
Taxpayers shall file tax returns truthfully and in accordance with the law, and are responsible for the authenticity and completeness of the declarations.
Article 20 The tax authorities shall compare the taxpayer's tax declaration data with the relevant data provided by the environmental protection authorities.
If the tax authorities find that the taxpayer's tax declaration data and materials are abnormal or the taxpayer has not filed a tax return within the prescribed period, they may request the environmental protection authority to conduct a review. The environmental protection authority shall issue review opinions to the tax authorities within fifteen days from the date of receiving the data and materials from the tax authorities. The tax authorities shall adjust the taxpayer's payable tax amount according to the data and materials reviewed by the environmental protection authority.
Article 21 Where the amount of pollutant emissions is calculated in accordance with the provisions of Item 4 of Article 10 of this Law, the tax authorities shall, together with the competent environmental protection authorities, determine the types and quantities of pollutants and the amount of tax payable.
Article 22 The specific measures for taxpayers engaging in marine engineering to discharge taxable air pollutants, water pollutants, or solid waste into the maritime areas under the jurisdiction of the People's Republic of China and for declaring and paying environmental protection tax shall be stipulated by the tax authorities of the State Council in conjunction with the maritime authorities of the State Council.
Article 23 If taxpayers, tax authorities, environmental protection authorities, or their staff violate the provisions of this Law, they shall be held legally responsible in accordance with the provisions of the "Law of the People's Republic of China on the Administration of Tax Collection," the "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 investment in environmental protection construction, and provide financial and policy support for taxpayers' investment in automatic pollutant monitoring equipment.
Chapter 5: Supplementary Provisions
Article 25 The meanings of the following terms in this law:
(1) Pollution equivalent refers to a comprehensive indicator or measurement unit used to assess different pollutants' impact on environmental pollution based on the harmfulness of the pollutants or pollution discharge activities to the environment and the technical and economic feasibility of treatment. Different pollutants with the same pollution equivalent in the same medium have roughly equivalent pollution levels.
(2) Pollution discharge coefficient refers to the statistical average amount of pollutants that should be emitted per unit of product under normal technical, economic, and management conditions.
(3) Material balance refers to a method of measuring the raw materials used, products produced, and waste generated in the production process based on the principle of conservation of mass.
Article 26 Enterprises, institutions, and other producers and operators that directly discharge taxable pollutants into the environment shall, in addition to paying environmental protection taxes in accordance with this Law, be liable for the damage caused in accordance with the law.
Article 27 From the date of the implementation of this Law, environmental protection tax shall be levied in accordance with the provisions of this Law, and pollutant discharge fees shall no longer be collected.
Article 28 This Law shall come into force on January 1, 2018.
