Since 2010, the Chinese government has been gradually pushing forward the Resource Tax (RT) Reform, with an aim to replace the existing volume-based taxation method by an ad valorem based taxation method as well as to clean up various charges and fees levied on resources. Following this objective, China has undergone several rounds of RT Reform in recent years, from crude oil and natural gas to coal, from the western regions to nationwide. Recently, the Ministry of Finance (MOF) and the State Administration of Taxation (SAT) jointly issued Caishui  No.53 (Circular 53) to comprehensively move forward the RT Reform by expanding it to almost all of the remaining taxable resources and piloting RT on water resources in the Hebei Province. This is a significant step towards the completion of the RT Reform. Meanwhile, the issuance of Caishui  No.54 (Circular 54) and Caishui  No.55 (Circular 55) on the same date provides further clarifications on detailed matters relating to RT Reform policies. These three new circulars will take effect from 1 July 2016.
In this issue of News Flash, we will walk you through the progress of the RT Reform over the past few years, introduce the highlights of this round of RT Reform and share our observations with you. Relevant enterprises should assess the potential impact on their business and get prepared.