How the Environmental Protection Tax Will Affect Companies in China

Fighting pollution has always been a top priority for China, and all the measure taken so far have not discouraged the business climate and the investors from abroad. Even if the authorities have decided for an environmental protection tax imposed on existing companies in China, this is not going the affect the overall activities in the country. The main purpose is to lower the level of pollution with all kinds of innovative solutions. All investors can enter the Chinese market and set up companies, as the legislation in this sense is favorable. If you need legal counseling in company incorporation matters in China, we suggest you talk to one of our Chinese lawyers.

Encouraging the eco-friendly manufacture in China

As the largest producer in the world, China struggles with pollution and continues to bring all kinds of solutions. Starting with January 2018, pollutant companies in China should consider the tax which needs to be paid in accordance with the recently adopted act: The Environmental Protection Tax Law. To encourage the businesses made in a friendly climate and minimum waste levels which lead to pollution, the Chinese government will impose a tax between CNY 1.2 and CNY 12 for each emitted unit of polluted air and water. Even though there are considerations that this fee is enforced only to upsurge the fiscal income in China, the government outlines that the main purpose of such tax is to replace the previous pollutant discharge levy which was formerly collected by the local environmental divisions.

Advice for new companies in China

Companies are suggested to respect the environmental laws in China and to align with the accepted levels of pollution in order to avoid any penalties or taxes. The tax authorities in China consider that this new rule is actually the first green tax ever imposed in this country and will represent the main solution to fight pollution, to bring down the levels as much as possible and to expand the environmental terms.
If you want to set up a business in China, and you need to know more about the legislation in this matter, you can contact our Chinese attorneys for support.