Resource tax in China is levied on the specified natural resources and is regulated in accordance with the provisions of the Provisional Rules on Resource Tax (the “PRRT”).

Taxpayers

The taxpayers of resource tax include tstate-owned enterprises, collective enterprises,

private enterprises, joint equity enterprises, the enterprises with foreign investment, other units, individual business operators and other individuals engaged in the exploitation of taxable mineral products or production of salt within the territory of China.

The independent mines, united enterprises and other units who purchase untaxed mineral products shall be the withholding agents for resource tax.

Tax Items

Seven tax items are levied on quantity basis according to product types as followed:

1. Crude oil. The exploitation of natural crude oil is subject to tax, and artificial oil is not subject to tax.
2. Natural gas. The natural gas special exploited and that exploited together with crude are subject to tax.
3. Coal. Raw coal is subject to tax. Coal washing and coal dressing and other coal products are not subject to tax. 
4.   Other noon-metal ores.
5. Ferrous metal ores, including iron ores, manganese ores and chromium ores.
6. Non-ferrous metal ores, including copper ores, lead and zinc ores, bauxite ores,  tungsten ores, tin ores, antimony ores, molybdenum ores, nickel ores, and gold ores.
7. Salt, including solid salt and liquid salt.

Tax Rates and Calculations

The amount of resource tax payable is based on the quantity of the taxable products by applying the applicable tax amount per unit. If different taxable products have not been regulated for separately, the tax authority is entitled to collect the resource tax at the highest rate on the volume. The adjustments to tax rate of this tax type have been made in the relevant circulars and notices.

The formula for calculating resource tax is:

Tax payable = Quantity of taxable products × Applicable tax amount per unit

The quantity taxable products is stipulated as follows:

1. For taxpayers exploiting or producing taxable products for sale, the sales value shall bethe assessable volume.
2. For taxpayers exploiting producing taxable products for self-use, the self-used volume shall be the assessable volume.

Exemptions and Reductions

1. Crude oil used for heating or repairing wells in the course of exploiting crude oil may be exempt.
2. For taxpayers suffering huge losses due to such reasons as accidents or natural disasters in the course of exploiting or producing taxable products, tax reduction or exemption  may be given by taking into consideration the seriousness of the situation.
3. The resource tax payable on iron ores and on the non-ferrous metal ores by independent mines may be reduced.
4. The resource tax on non-ferrous metal ores may be reduced.
5. Other tax reduction or exemption items as stipulated by the state council.

Tax Payment

Resources Tax must be paid to the local competent tax authorities where the taxable products are exploited or produced. The time limit for the tax payment shall be one day, three days, five days, ten days, fifteen days or one month. If tax payments cannot be made on a fixed period basis, the tax may be paid on a transaction basis.