Govt annuls naphtha consumption tax for use in ethylene production

27 May '08

2 min read

The statutory tax rates of naphtha, solvent oil, lubricating oil and fuel oil will work again and there will be an exemption of excise duties for the imported naphtha, domestically made naphtha and domestically processed naphtha used as the chemical raw materials.

Recently, the reporter learned that since January 1 this year, the State made adjustments to the policy on excise duties of some processed oil including naphtha.

The Circular jointly issued by the Ministry of Finance (MOF) and the State Administration of Taxation (SAT) regulates that from January 1 this year the unit tax rates of naphtha, solvent oil and lubricating oil will be RMB 0.20/ liter, and the unit tax rate of fuel oil will be RMB 0.10/ liter.

The Circular also regulates that, from Jan. 1, 2008 to Dec. 31, 2010, there will be exemption of excise duties for imported naphtha and the domestically made naphtha that is to be used as the raw materials of ethylene and aromatics products. The excise duty on the naphtha directly sold out by production enterprises shall be levied according to legal provisions. The specific measures for levy or exemption of excise duties on naphtha shall be separately determined by MOF and SAT.

The taxable consumption goods using the taxed naphtha, lubricating oil and fuel oil that are taken back by way of purchase or consigned processing as the raw materials, it is permitted that the tax money paid for the excise duties of the raw materials can be deducted from the payable tax amount of the excise duties.

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State Administration of Taxation

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