Issued by: Ministry of Finance State Administration of Taxation
Document No.: CaiShui [2016] No. 54
Date of Issuance: 2016-5-9
Financial Departments (Bureaus), Local Taxation Bureaus of all provinces, autonomous regions, municipalities directly under the Central Government and cities specifically designated in the state budgetary plan, State Taxation Bureaus of Tibet and Ningxia Hui Nationality Autonomous Regions, and Financial Bureau of Xinjiang Production and Construction Corps,
Based on the deployment and decision of the Party Central Committee and the State Council, the resource tax reform shall be comprehensively pushed forward from July 1st, 2016 onward. To practically do a good job for the resource tax reform and secure the effective implementation of the Notice of the Ministry of Finance and the State Administration of Taxation on Comprehensively Pushing Forward the Resource Tax Reform (CaiShui [2016] No. 53, hereinafter referred to the Reform Notice), the specific policy issues concerning the resource tax reform (exclusive of water resource tax, the same hereinafter) are hereby notified as follows:
I. Determination of the taxation base of resource tax
The taxation base of resource tax shall be the sales amount or the sales quantity of taxable products. The object of taxation of each taxable item, including raw ore, concentrate (or processed products of raw ore, the same hereinafter), gold ingots and sodium chloride primary products, shall be executed according to the relevant provisions of the Range Table of Taxable Items and Tax Rates of Resource Tax attached to the Reform Notice. For other mineral products whose names are not listed, the peoples’ governments at the provincial level can set taxable items based on mineral species for local major mineral products, set taxable items for the remaining mineral products by category and determine the objects of taxation according to the main forms of the mineral products when they are sold (e.g. raw mineral, concentrate).
i. Confirmation of sales amount.
Sales amount refers to all of the prices and off-price charges collected by taxpayers from the buyers when the taxpayers sell taxable products, exclusive of output VAT payable, the fare and other costs.
The fare and other costs refer to the transportation fees, construction funds, arising when transporting taxable products from pitheads or washing (processing) areas to stations, ports or the places designated by buyers, and the loading, unloading, warehouse fees and other fees related to ports arising in the process of transportation. The fare and other costs and the sales amount shall be calculated separately. For the fare and other costs, whose corresponding evidences cannot be obtained or which cannot be calculated separately from the sales amount, the resource tax shall be calculated and collected.
ii. Conversion and translation of the sale amount of raw ore and that of concentrate.
To balance the tax burden between raw ore and concentrate, for the same taxable product, if the object of taxation is concentrate, taxpayers shall convert the sales amount of raw ore into that of concentrate to pay resource tax, when they sell raw ore; if the object of taxation is raw ore, taxpayers shall translate the sales amount of concentrate into that of raw ore and pay resource tax, when they sell the concentrate processed from self-mined raw ore. In principal, the conversation ratio or the translation rate shall be calculated by the sales price of raw ore, the sales price of concentrate and concentration ratio, or by the sales amount of raw ore, the average cost in the processing stage and the profit.
The object of taxation of the gold mine is gold ingots. Taxpayers shall convert its sales amount into that of gold ingots to pay resource tax when they sell gold raw ore or gold concentrate.
The conversation ratio or the translation rate shall be determined by the financial departments at the provincial level according to the principle of convenience and feasibility and equity and justice and submitted to the Ministry of Finance and the State Administration of Taxation for the record.
II. Determination of the applicable tax rate of resource tax
The people’s governments of all provinces shall, according to the requirements of the Reform Notice, put forward or determine their local applicable tax rate of resource tax. When measuring and calculating specific applicable tax rates, they shall take full account of local resource endowment, enterprises’ bearing capacity, screening fees and funds and other factors, according to the principal of translating taxes and fees before and after the reform, and regard the resource tax paid by enterprises, amounts of mineral resource compensation fees(the amount of resource tax paid by iron-ore mining enterprises shall be measured and calculated according to 40% of tax-amount standard) and market prices of mineral products in recent years as the determination basis. In principal, one grade of tax rate is set for one mineral species, but for a small number of mineral species whose mineral conditions differ greatly, two grades of tax rate can be set according to different resource conditions and different places.
III. Preferential Policies and Administration of Resource Tax
i. For mineral resources mined underneath constructions, railway roads or water bodies using the method of backfill, a reduced 50% of resource tax shall be collected.
Backfill refers to the mining method whereby along with the advancement of extraction, the excavated spaces are to be filled with waste rocks, tailings, waste residues, construction wastes and special qualified filling materials.
ii. For the mineral resource mined from the mines at the exhaustion stage of being mined for more than 15 years, a reduced 30% of resource tax shall be collected.
The mines at the exhaustion stage refer to those whose remaining exploitable reserves decline to below 20% of the original designed exploitable reserves (inclusive of) or whose remaining service life is less than five years and which are determined by the single mine of mining enterprises serving as the unit.
iii. For the mineral products extracted from low grade ore, waste rocks, tailings, waste residue, waste water and waste gas whose use is encouraged, whether they will be given tax deduction or tax exemption or not shall be determined by people’s governments at the provincial level according to the actual conditions.
IV. Settlement of associated mineral resource’s tax levy & collection and tax exemption
To promote the comprehensive utilization of associated mineral resource, if taxpayers mine and sell associated mineral resource and separately calculate the sales amount of associated mineral resource and that of major mineral products, associated mineral resource shall be provisionally exempted from resource tax; if taxpayers fail to separately calculate them, the resource tax of associated mineral resource shall be calculated and collected according to the taxable items and applicable tax rates of major mineral products. Whereas there are separate provisions by the Ministry of Finance and the State Administration of Taxation, those provisions shall prevail.
V. Tax Payment Stages and Places
Resource tax shall be calculated and paid in the sale or self-use stages of taxable products. The taxpayers, who process concentrate products from their self-mined raw ore, shall not pay resource tax when transporting and using raw ore, but they shall pay resource tax when selling or using concentrate by themselves.
The investing, allocating, paying debts, donating and bartering with taxable products shall be deemed as selling activities and taxpayers shall calculate and pay resource tax for them according to the relevant provisions of the Notice.
Taxpayers shall pay resource tax in the places where mineral products are mined or salt is produced. When taxpayers mine or produce taxable products in their own provinces, autonomous regions, municipalities directly under the Central Government, if they need to adjust their tax payment places, it shall be determined by the taxation authorities at the provincial level.
VI. Other Matters
i. Where taxpayers further process the taxable products, whose resource tax has been paid, into new taxable products and sell them, they shall not pay resource tax. Where taxpayers conduct mixed sale of untaxed products and taxed products or mix and process untaxed products and taxed products into taxable products to sell, they shall accurately calculate the purchase amount of taxed products. When they calculate the sales amount of the processed taxable products, it is allowed to deduct the purchase amount of taxed products; where the purchase amount of taxed products is not calculated separately, resource tax shall be collectively calculated and paid.
ii. Where taxpayers mine raw ore or process their self-mined raw ore into concentrate before July 1st, 2016 and sell them after July 1st, 2016, they shall pay resource tax according to the provisions of the Notice; where taxpayers sign the sale contract of taxable products before July 1st, 2017 and receive payments or obtain the receipt of claiming payments after July 1st, 2017, they shall pay resource tax according to the provisions of the Notice; where resource tax for the raw ore (or gold concentrate), used to process into concentrate (or gold ingots) sold after July 1st, 2016, has been paid according to the levy of tax on quantity base, and has been separately calculated from the taxable concentrate (or gold ingots), the taxpayers shall not pay resource tax any longer.
iii. For the mineral products extracted from tailings, waste residue, waste water, waste rocks and waste gas, whose resource tax is paid before July 1st, 2016 according to the sale quantity of raw ore, taxpayers shall not pay resource tax any longer.
Please observe and implement the above-mentioned provisions. If previous provisions are not consistent with the Notice, the latter shall prevail.
Ministry of Finance State Administration of Taxation
May 9th, 2016
