China | Preferential Tax Policies Supporting Green Development 

The State Administration of Taxation recently issued the Guidelines for Tax and Fee Preferential Policies in Support of Green Development (‘Guidelines’).

The Guidelines aim to reduce the discharge of major pollutants and effectively control environmental risks by implementing preferential tax policies and promoting high-quality development. We highlight the main tax reductions and exemptions below.

Contract Energy Management Projects 

  • Contracts of energy management projects temporarily exempted from value-added tax (goods and services).
  • Companies implementing contract energy management projects can reduce and be exempted from corporate income tax on income from energy-saving services.

Heating Enterprises

  • Heating fee income obtained by heating enterprises exempted from value-added tax.
  • Factory buildings used by heating enterprises exempted from property tax.
  • Land used by heating enterprises exempted from urban land use tax.

Energy-saving and Environmentally Friendly Batteries and Coatings

  • Energy-saving and environmentally friendly battery protection or coatings exempted from consumption tax. 

Energy and Water-saving

  • Drip irrigation products exempted from value-added tax.
  • Income from engaging in energy-saving and water-saving projects that meet the required conditions can reduce or be exempted from corporate income tax.
  • Investment amount for purchasing specialized equipment for energy and water conservation can use a certain proportion of enterprise income tax credit.

New Energy Vehicles and Ships

  • New energy vehicles and vessels exempted from vehicle and vessel tax
  • Energy-saving vehicles can reduce vehicle and vessel tax by 50%
  • New energy vehicles exempted from vehicle purchase tax.

Water Saving Resources

Exempted water resource tax on reclaimed water from sewage treatment, pumped storage power generation, or re-injection of oil extraction drainage after separation and purification in closed pipelines.

Pollutant Reduction

Exempted environmental protection tax on pollutants discharged from agricultural production or discharged from centralized treatment sites for urban and rural sewage and domestic waste.

Contact Us

If you have questions or concerns related to the Preferential Policies in Support of Green Development or other related matters, please contact Horizons at to schedule a consultation session. Horizons can provide insight, expertise and the right solutions for you. 

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