Resource Tax Law of the People's Republic of China

(Effective from the date of the founding of the People's Republic of China)

Article 1 Entities and individuals that develop taxable resources in the territory of the People's Republic of China and other sea areas under the jurisdiction of the People's Republic of China shall be taxpayers of resource tax and shall pay resource tax in accordance with the provisions of this Law.

The specific scope of taxable resources shall be determined by the "Tax Items and Tax Rates Table of Resource Taxes" (hereinafter referred to as the "Tax Items and Tax Rates Table") attached to this Law.

Article 2 The tax items and tax rates of resource tax shall be implemented in accordance with the "Tax Items and Tax Rates Table".

If the "Tax Items and Tax Rates Table" stipulates that a range of tax rates shall be implemented, the specific applicable tax rate shall be proposed by the people's government of the province, autonomous region or municipality directly under the Central Government within the tax rate range specified in the "Tax Items and Tax Rates Table" after comprehensively considering the grade, mining conditions and impact on the ecological environment of the taxable resources, and reported to the Standing Committee of the People's Congress at the same level for decision, and reported to the Standing Committee of the National People's Congress and the State Council for filing. If the "Tax Items and Tax Rates Table" stipulates that the taxable objects are raw ore or ore dressing, the specific applicable tax rates shall be determined separately.

Article 3 Resource tax shall be levied on the basis of value or quantity in accordance with the Tax Items and Tax Rates Table.

Where the Tax Items and Tax Rates Table provides that one may choose to levy on the basis of value or quantity, the specific levy method shall be proposed by the people's government of the province, autonomous region or municipality directly under the Central Government, reported to the Standing Committee of the People's Congress at the same level for decision, and reported to the Standing Committee of the National People's Congress and the State Council for record.

Where levied on the basis of value, the tax payable shall be calculated by multiplying the sales volume of the taxable resource products (hereinafter referred to as the taxable products) by the specific applicable tax rate. Where levied on the basis of quantity, the tax payable shall be calculated by multiplying the sales volume of the taxable products by the specific applicable tax rate.

Where the taxable products are mineral products, they include raw ores and mineral processing products.

Article 4 Where a taxpayer mines or produces taxable products of different tax items, he shall separately calculate the sales volume or sales volume of taxable products of different tax items; if he fails to separately calculate or cannot accurately provide the sales volume or sales volume of taxable products of different tax items, he shall apply the higher tax rate.

Article 5 Taxpayers who mine or produce taxable products for their own use shall pay resource tax in accordance with the provisions of this Law; however, if they use the products for the continuous production of taxable products, they shall not pay resource tax.

Article 6 Resource tax shall be exempted in any of the following circumstances:

(i) Crude oil and natural gas used for heating during the mining of crude oil and transportation of crude oil within the oil field;

(ii) Coal-bearing (layer) gas extracted by coal mining enterprises for production safety needs.

Resource tax shall be reduced in any of the following circumstances:

(i) Crude oil and natural gas extracted from low-abundance oil and gas fields shall be subject to a 20% reduction in resource tax;

(ii) Crude oil and natural gas extracted from high-sulfur natural gas, tertiary oil recovery and deepwater oil and gas fields shall be subject to a 30% reduction in resource tax;

(iii) Heavy oil and high-condensate oil shall be subject to a 40% reduction in resource tax;

(iv) Mineral products extracted from depleted mines shall be subject to a 30% reduction in resource tax.

According to the needs of national economic and social development, the State Council may provide for exemption or reduction of resource tax in cases that are conducive to promoting resource conservation and intensive utilization, protecting the environment, etc., and report it to the Standing Committee of the National People's Congress for record.

Article 7 In any of the following cases, the province, autonomous region, or municipality directly under the Central Government may decide to exempt or reduce resource tax:

(i) The taxpayer suffers major losses due to accidents or natural disasters during the mining or production of taxable products;

(ii) The taxpayer mines associated minerals, low-grade minerals, or tailings.

The specific measures for exemption or reduction of resource tax stipulated in the preceding paragraph shall be proposed by the people's government of the province, autonomous region, or municipality directly under the Central Government, reported to the Standing Committee of the People's Congress at the same level for decision, and reported to the Standing Committee of the National People's Congress and the State Council for record.

Article 8 The tax-exempt or tax-reduced items of the taxpayer shall be separately accounted for sales or sales volume; if the sales or sales volume is not separately accounted for or cannot be accurately provided, no tax exemption or tax reduction shall be granted.

Article 9 Resource tax shall be collected and managed by the tax authorities in accordance with the provisions of this Law and the Law of the People's Republic of China on the Collection and Administration of Taxation.

Taxation authorities and relevant departments such as natural resources shall establish a working coordination mechanism to strengthen resource tax collection and management.

Article 10 When a taxpayer sells taxable products, the tax obligation shall arise on the day when the sales proceeds are received or the receipt for the sales proceeds is obtained; if the taxable products are used for personal use, the tax obligation shall arise on the day when the taxable products are transferred.

Article 11 Taxpayers shall declare and pay resource tax to the tax authorities at the place where the taxable products are mined or produced.

Article 12 Resource tax shall be declared and paid on a monthly or quarterly basis; if it cannot be calculated and paid on a fixed basis, it may be declared and paid on a per-time basis.

If a taxpayer declares and pays on a monthly or quarterly basis, he shall file a tax return and pay the tax to the tax authorities within 15 days from the end of the month or quarter; if he declares and pays on a per-time basis, he shall file a tax return and pay the tax to the tax authorities within 15 days from the date when the tax obligation arises.

Article 13 If taxpayers, tax authorities and their staff violate the provisions of this Law, they shall be held legally liable in accordance with the provisions of the "Tax Collection and Management Law of the People's Republic of China" and relevant laws and regulations.

Article 14 The State Council shall, in accordance with the needs of national economic and social development and in accordance with the principles of this Law, pilot the collection of water resource tax on units and individuals that use surface water or groundwater. If water resource tax is collected, water resource fee collection shall be stopped.

The water resource tax shall be subject to different tax rates based on local water resource conditions, water use types and economic development.

The implementation measures for the pilot water resource tax shall be formulated by the State Council and submitted to the Standing Committee of the National People's Congress for record.

Within five years from the date of implementation of this Law, the State Council shall report to the Standing Committee of the National People's Congress on the pilot water resource tax collection and make timely proposals for amending the law.

Article 15 Enterprises that jointly exploit onshore and offshore petroleum resources in accordance with the law shall pay resource tax.

For enterprises that have legally concluded a contract for the joint exploitation of onshore and offshore petroleum resources in accordance with the law before November 1, 2011, they shall continue to pay mining area usage fees in accordance with relevant national regulations during the validity period of the contract, and shall not pay resource tax; after the expiration of the contract, they shall pay resource tax in accordance with the law.

Article 16 The following terms in this Law have the following meanings:

(i) Low-abundance oil and gas fields include onshore low-abundance oil fields, onshore low-abundance gas fields, offshore low-abundance oil fields, and offshore low-abundance gas fields. Onshore low-abundance oil fields refer to oil fields with a recoverable crude oil reserve abundance of less than 250,000 cubic meters per square kilometer; onshore low-abundance gas fields refer to gas fields with a recoverable natural gas reserve abundance of less than 250 million cubic meters per square kilometer; offshore low-abundance oil fields refer to oil fields with a recoverable crude oil reserve abundance of less than 600,000 cubic meters per square kilometer; offshore low-abundance gas fields refer to gas fields with a recoverable natural gas reserve abundance of less than 600 million cubic meters per square kilometer.

(ii) High-sulfur natural gas refers to natural gas with a hydrogen sulfide content of more than 30 grams per cubic meter.

(iii) Tertiary oil recovery refers to the continued oil recovery by polymer flooding, composite flooding, foam flooding, gas-water alternating flooding, carbon dioxide flooding, microbial flooding, etc. after secondary oil recovery.

(iv) Deepwater oil and gas fields refer to oil and gas fields with a water depth of more than 300 meters.

(v) Heavy oil refers to crude oil with a formation viscosity greater than or equal to 50 millipascals per second or a crude oil density greater than or equal to 0.92 grams per cubic centimeter.

(vi) High freezing point oil refers to crude oil with a freezing point higher than 40 degrees Celsius.

(vii) Depletion period mines refer to mines with a designed mining life of more than 15 years and whose remaining recoverable reserves have fallen to less than 20% of the original designed recoverable reserves or whose remaining mining life does not exceed 5 years. Depletion period mines are determined as individual mines under the mining enterprise.

Article 17 This Law shall come into force on the date of the founding of the People's Republic of China.

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