China Notices Import-Tax Exemption for Overland 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 petroleum/natural gas in China's specific land areas, with approval by the State Council, hereby announced are the taxation policies for importing goods based upon petroleum/natural gas exploitation in China's specific land areas during the "Twelfth Five-Year Plan" period:

1. The specific land areas herein refer to the P. R. China's deserts and gobi (see Annex 1 herein) and its State-approved land blocks exploited for petroleum/natural gas by means of Sino-foreign cooperation.

2. From January 1, 2011 till December 31, 2015, exemption from import tariffs shall 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 2 herein) unavailable in China and directly used for the petroleum/natural gas exploitation under any wholly Chinese-run projects for petroleum/natural gas exploitation in China's deserts and gobi (see Annex 1 herein);

From January 1, 2011 till December 31, 2015, exemption from import tariffs and import value-added tax shall 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 2 herein) unavailable in China and directly used for the petroleum/natural gas exploitation under any Sino-foreign cooperation projects for petroleum/natural gas exploitation in China's State-approved land blocks.

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 of such tax exemption (see Annex 2 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 in accordance with Article 2 regulations herein.

5. The exemption from import tariffs may be applied to imports by lease of the listed tax-exempt goods under the compliant wholly-Chinese-run projects in China's deserts and gobi (see Annex 1 herein);

The import tax exemption may be applied to imports by lease of the listed tax-exempt goods under the compliant Sino-foreign cooperation projects; and Both of the imports by lease shall be subject to the quota of such tax exemption.

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


Annexes:

1. List of China's Specific Land Areas for Petroleum/Natural Gas Exploitation (omitted)

2. Administrative Regulations on Import-Tax Exemption for Imports upon Petroleum/Natural Gas Exploitation in China's Specific Land Areas (omitted)