The Ship Tonnage 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 Ships entering the domestic ports from ports outside the People's Republic of China (hereinafter referred to as taxable ships) shall pay ship tonnage tax (hereinafter referred to as tonnage tax) in accordance with this law.

Article 2 The tax items and tax rates of tonnage tax shall be implemented in accordance with the "Tonnage Tax Tax Items and Tax Rates Table" attached to this law.

Article 3 Tonnage tax sets preferential tax rates and ordinary tax rates.

Taxable ships of the nationality of the People's Republic of China, and taxable ships for which the country of registry (region) and the People's Republic of China have signed a treaty or agreement containing a clause on mutual most-favored-nation treatment of ship taxes and fees, shall be subject to preferential tax rates.

Other taxable ships shall be subject to ordinary tax rates.

Article 4 Tonnage tax shall be levied according to the net tonnage of the ship and the term of the tonnage tax license.

The person in charge of the taxable ship may choose to apply for a tonnage tax license of a certain term in accordance with the "Tonnage Tax Tax Items and Tax Rates Table" when declaring tax each time.

Article 5 The taxable amount of tonnage tax shall be calculated by multiplying the net tonnage of the ship by the applicable tax rate.

Article 6 The tonnage tax shall be collected by the customs. The customs shall issue a payment voucher when collecting tonnage tax.

After the person in charge of the taxable ship pays the tonnage tax or provides a guarantee, the customs shall issue a tonnage tax license in accordance with the period of the license applied for.

Article 7 When a taxable ship enters a port to go through entry procedures, it shall declare and pay taxes to the customs to obtain a tonnage tax license, or submit the tonnage tax license (or apply for verification of the electronic information of the tonnage tax license). When a taxable ship leaves a port to go through exit procedures, it shall submit the tonnage tax license (or apply for verification of the electronic information of the tonnage tax license).

When applying for a tonnage tax license, the person in charge of a taxable ship shall provide the following documents to the customs:

(i) Ship's nationality certificate or a certificate of storage of the ship's nationality certificate issued by the maritime department;

(ii) Ship's tonnage certificate.

If a taxable vessel anchors at a place without a customs office due to force majeure, the person in charge of the vessel shall immediately report to the nearby customs and, after the force majeure is eliminated, declare and pay taxes to the customs in accordance with the provisions of this Law.

Article 8 The time when the tonnage tax obligation arises is the day when the taxable vessel enters the port.

If a taxable vessel has not left the port after the expiration of its tonnage tax license, it shall apply for a new tonnage tax license and continue to pay tonnage tax from the day after the expiration of the previous license.

Article 9 The following ships are exempt from tonnage tax:

(i) Ships with a taxable amount of less than RMB 50;

(ii) Empty ships imported to the port for the first time after the ownership of the ship is obtained from abroad by purchase, donation, inheritance, etc.;

(iii) Ships that do not load or unload passengers and cargo within 24 hours after the expiration of the tonnage tax license;

(iv) Non-motorized ships (excluding non-motorized barges);

(v) Fishing and aquaculture vessels;

(vi) Ships that are not loading or unloading passengers and cargo for refuge, quarantine, repair, modification, termination of operation or dismantling;

(vii) Ships used exclusively or requisitioned by the army or armed police force;

(viii) Police ships;

(ix) Ships of foreign embassies and consulates in China, representative offices of international organizations in China and their relevant personnel that should be exempted from tax in accordance with the law;

(x) Other ships specified by the State Council.

The tax exemption provisions in the tenth item of the preceding paragraph shall be reported by the State Council to the Standing Committee of the National People's Congress for record.

Article 10 If a taxable vessel encounters any of the following circumstances during the tonnage tax license period, the customs shall extend the tonnage tax license period according to the actual number of days:

(i) Refuge, quarantine, repair, or modification, without loading or unloading passengers and cargo;

(ii) Requisitioned by the military or armed police force.

Article 11 Vessels that meet the requirements of Article 9, paragraph 1, items 5 to 9 and Article 10 of this Law shall provide legally binding certification documents or usage relationship certification documents issued by maritime departments, fishery vessel management departments and other departments and institutions to state the basis and reasons for tax exemption or extension of the tonnage tax license period.

Article 12 The person in charge of a taxable vessel shall pay the tax within 15 days from the date on which the customs issues the tonnage tax payment certificate. If the tax is not paid on time, a tax arrears fee of 0.05% of the arrears shall be charged daily from the date on which the tax is overdue to the date on which the tax is paid.

Article 13 If a taxable ship declares and completes entry and exit formalities before arriving at the port, the person in charge of the taxable ship shall provide the customs with a guarantee that is commensurate with its obligation to pay tonnage tax in accordance with the law; after the taxable ship arrives at the port, it shall declare and pay taxes to the customs in accordance with the provisions of this Law.

The following property and rights can be used as collateral:

(i) Renminbi and freely convertible currencies;

(ii) Bills of exchange, promissory notes, checks, bonds, certificates of deposit;

(iii) Letters of guarantee from banks and non-bank financial institutions;

(iv) Other property and rights recognized by the customs in accordance with the law.

Article 14 If the net tonnage of a taxable ship changes due to repairs or modifications during the term of its tonnage tax license, the tonnage tax license shall remain valid. When a taxable ship goes through entry and exit formalities, it shall provide documents proving that the ship has been repaired or modified.

Article 15 If the applicable tax rate of a taxable ship changes due to adjustments to tax items and tax rates or changes in ship registration during the term of its tonnage tax license, the tonnage tax license shall remain valid.

If the applicable tax rate changes due to the change of ship's registry, the taxable ship shall provide the certification document of the change of ship's registry when handling entry and exit formalities.

Article 16 If the tonnage tax license is damaged or lost before the expiration date, the original issuing customs shall apply in writing for the issuance of a duplicate tonnage tax license, and no additional tax shall be paid.

Article 17 If the customs finds that the tax is under-collected or evaded, it shall collect the tax within one year from the date on which the taxable ship should pay the tax. However, if the tax is under-collected or evaded due to the violation of regulations by the taxable ship, the customs may collect the tax within three years from the date on which the tax should be paid, and impose a tax arrears fee of 0.05% of the under-collected or evaded tax per day from the date on which the tax should be paid.

If the customs finds that the tax is over-collected, it shall notify the taxable ship within 24 hours to handle the refund procedures, and add the interest on the bank's demand deposit for the same period.

If a taxable vessel is found to have overpaid taxes, it may request the customs in writing to refund the overpaid taxes and add the interest on bank current deposits during the same period within three years from the date of tax payment; the customs shall verify and notify the taxable vessel to go through the refund procedures within 30 days from the date of accepting the refund application.

The taxable vessel shall go through the relevant refund procedures within three months from the date of receiving the notice specified in the second and third paragraphs of this article.

Article 18 If a taxable vessel commits any of the following acts, the customs shall order it to correct the problem within a time limit and impose a fine of not less than RMB 2,000 but not more than RMB 30,000; if it fails to pay or underpays the tax payable, it shall be fined not less than 50% but not more than 5 times the amount of the tax not paid or underpaid, but the fine shall not be less than RMB 2,000:

(i) Failure to declare and pay taxes or obtain tonnage tax licenses in accordance with regulations;

(ii) Failure to submit tonnage tax licenses (or apply for verification of electronic information of tonnage tax licenses) and provide other supporting documents in accordance with regulations.

Article 19 Tonnage tax, tax arrears and fines shall be calculated in RMB.

Article 20: The collection of tonnage tax, if not provided for in this Law, shall be implemented in accordance with the provisions of the relevant laws and administrative regulations on tax collection and management.

Article 21: The meanings of the following terms in this Law and the attached "Tonnage Tax Items and Rates Table":

Net tonnage refers to the net tonnage indicated on the ship tonnage certificate issued or authorized by the government of the country (region) of registry.

Non-motorized vessel refers to a vessel that has no power device and is driven by external force.

Non-motorized barge refers to a non-motorized vessel registered as a barge in the ship registration authority.

Fishing and aquaculture vessels refer to vessels registered as fishing vessels or aquaculture vessels in the fishery vessel management department of the People's Republic of China.

Tugboat refers to a professional operating vessel specially used for towing (pushing) transport vessels.

The term of tonnage tax license refers to the period calculated in terms of the Gregorian calendar year and day.

Article 22: This Law shall take effect from the date of the founding of the People's Republic of China.