China Notices Import-Tax Exemption for Offshore Oil/Gas Exploitation

To provincial authorities of finance and of state 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/development of China's offshore petroleum/natural gas, with approval by the State Council, hereby announced are the taxation policies for importing goods based on petroleum/natural gas exploitation from China seas 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 within prescribed tax-exempt quota of any equipment, instruments, components, accessories and special tools (see a List of Tax-Exempt Goods in Annex 1 herein) under any project of petroleum/natural gas exploitation from China seas, which are unavailable in China and directly used for the petroleum/natural gas exploitation.

2. The seas herein refer to the P. R. China's continental seas, territorial waters, continental shelves, and other Chinese sea areas with marine resources (including intertidal zones of shallow seas).

3. Tax-exempt imports under the compliant exploration/development projects shall continue being subject to the annexed list of tax-exempt goods in combination with annual quota for such tax exemption (see Annex 1 herein).

4. The import tax exemption may be applied to temporary imports of the listed tax-exempt goods under the compliant projects, and China Customs shall handle them as temporary importing goods.

Where being beyond the Customs-prescribed deadline, such temporary imports may be extended in time limit on the strength of the Customs approval.

Within prescribed time limit, the import tax exemption may be granted to the extended temporary imports.

5. The import tax exemption may be applied to imports by lease of the listed tax-exempt goods under the compliant exploration/development projects, and the quota of such tax exemption shall also govern.

Regulated tax levy shall be applied to imports by lease of any unlisted goods.

6. The import tax exemption may continue applying to the imports of the listed tax-exempt goods under "old" foreign-cooperation projects approved prior to December 31, 1994 (see Annex 2 herein).


Annexes:

1. Administrative Regulations on Import-Tax Exemption for Imports upon Petroleum/Natural Gas Exploitation from China Seas (omitted)

2. List of Old Projects of Sino-Foreign Cooperation (omitted)


The Ministry of Finance of the P. R. China
The General Administration of Customs of the P. R. China
The State Administration of Taxation of the P. R. China

August 8, 2011