Gerneral Rules

The taxpayers for resource tax are the enterprises, companies and individuals exploiting taxable mineral products and producing salt within the PRC.  Resource taxes are calculated and taxed based on the product categories and quantities.

Calculation formula is:

Taxable Amount = Taxable Quantity x Unit Tax Amount

Resource tax exercises grade tax fluctuating within a certain range.

The current concreted performance of tax rate range as detailed in Table 4-1.

The specific applicable taxable amount is defined within the specified taxable amount range in accordance with the resource status of the taxable products exploited or produced by the taxpayers. The resources tax amount standard relating to crude oil and natural gas are readjusted by the government from July 1,2005. The adjusted price for crude oil is from RMB 8-30yuan /t to RMB 14-30yuan /t, natural gas is from RMB 2-15yuan/kl to RMB 7-15yuan/kl. The resources tax amount

standard relating to rock gold ore are readjusted,  and the adjusted price increased from RMB1.30-2.5Oyuan/t to RMB1.50-7.00yuan/t.

Main Preferential Terms for Deduction/Exemption

1) If the taxpayer incurs significant losses from accidents or natural disasters and so forth during the course of exploiting or producing the taxable products, the people's government  at  provincial,  autonomous  region  or municipality level shall reduce their level of tax or exempt them from tax according to the specific situation.

2) A 40% deduction is applicable to the taxable amount of resource tax for iron ores, which means 60% of the standard taxable amount is the actual rate.

3) No resource taxes are required for the crude oil and natural gas exploited by Sino-foreign cooperative petroleum/natural gas fields.

4) The crude oil, which is used for heat up and well repair in the process of crude oil exploitation, is exempted from resource tax.

5) A 30% reduction of applicable taxable amount standard of resource tax, which may be authorized by the provincial government, is applicable to the oil-fields with low abundance and the mines in the period of exhaustion within the boundary of Liaoning, Jilin and Heilongjiang provinces.