China Notices Import-Tax Exemption for Coal-Bed Methane Projects

To provincial authorities of finance and of taxation, the Finance Bureau of the Xinjiang Production & Construction Corps, Guangdong Sub-Administration of China Customs, and local customs directly under the General Administration of Customs:

To support the exploration and development of coal-bed methane and the control of coal mine gases, with approval by the State Council, hereby announced are the taxation policies for importing goods under coal-bed methane exploration and development projects during the "Twelfth Five-Year Plan" period:

1. From January 1, 2011 till December 31, 2015, exemption from import tariff and import value-added tax may be applied to the imports by China United Coalbed Methane Co., Ltd. (CUCBM) and its Chinese or foreign cooperators (hereinafter referred to as the CUCBM) under any project of coal-bed methane exploration and development in China's territory of any equipment, instruments, components, accessories and special tools (see an annexed list of such tax-free goods herein) that are unavailable in China and directly used for the coal-bed methane exploration and development.

2. Other Chinese entities engaging in the coal-bed methane exploration and development, shall make written application for such imports to the Ministry of Finance in advance as per prescribed procedure, and may be covered under the import tax preferences aforesaid in the light of the preferences for the CUCBM with joint approval by the Ministry of Finance, the General Administration of Customs and the State Administration of Taxation.

3. Import tax exemption may be applied to temporary imports of the listed tax-free goods under the compliant exploration and development projects. China Customs may handle them as temporary importing goods. Where being beyond the Customs-prescribed deadline, the temporary imports may be extended on the strength of the Customs approval. The import tax exemption may be granted within the time limit of the temporary imports (including the extended ones).

4. Import tax exemption may be applied to imports by lease of the listed tax-free goods under the compliant exploration and development projects, but normal taxation shall be applied to the imports by lease of any unlisted goods.

5. The Annex herein shall govern specific administrative regulations on the import taxation policies for the coal-bed methane exploration and development projects described herein.


Annex: Administrative Regulations on Exemption of Import Taxes for Imports under Coal-Bed Methane Exploration and Development Projects (omitted)