China Lifts Tariff on CBM, Oil and Gas Equipment Imports - Customs Forum

**admin** · 09-05-2011, 18:27 PM

China's rapidly growing domestic demand for energy is driving the country into the production of important natural resources to promote. In the three documents on 8 Published August, announced the Ministry of Finance (MOF), the General Administration of Customs (GAoC) and the State Administration of Taxation (SAT), the decision jointly, except for methane (CBM), oil and gas exploration equipment from import duties.

Reduction of customs duties on equipment CBM
After the "Circular on the import duty exemption for CBM exploration and development material (caiguanshui [2011] No.30)" during the 12th Five-year Plan period, China's first between January 2011 and 31 December 2015, CBM Group Co China. Ltd. - the company that explores for, develops and produces CBM - is exempt from both tariffs and VAT on import of equipment, appliances, machines and equipment that are directly responsible for the development of CBM resources are used. CBM Group and foreign partners are also able to get the same tax incentives.

The favorable tax policy is also to other domestic companies that are involved in the industry, but companies need to take place, applications for tax exemption before the actual imports and the approval of the MOF, and SAT GAoC file.

The new incentive will help them achieve the goal of China in their 12th Five-year plan of doubling the country's CBM production to 21 billion cubic meters per year 2011-2015 specified target, while the country can only be realized 20 percent of five-year production target between 2005 and 2010.

Reduction of tariffs on oil and gas industry
Used after the two circular import tariff elimination for materials and equipment in onshore and offshore oil and gas exploration and development (caiguanshui [2011] No.31 and caiguanshui [2011] No.32), in the period between 1 January 2011 and 31 December 2015, tax exemptions for the import of domestically unavailable devices, instruments and special tools, which are used directly for oil and gas exploration and development will be made available.

Onshore blocks jointly by Chinese and foreign enterprises with the approval of the Government is developing;; inland lakes, territorial waters and continental shelf exploration projects that receive the tax incentives are likely to be found in designated areas like the Gobi desert. All the designated onshore areas are listed in Appendix One to Circular No. 31.

Circular No.32 indicates that the joint ownership of projects before 31 Chinese and foreign enterprises December 1994 be approved, continued to benefit from tax exemptions, if participating companies to import the equipment referred for exploration purposes. All these "old" projects are specifically listed in the facility two to Circular No.32.

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