Home  Contact Us
  Follow Us On:
 
Search:
Advertising Advertising Free Newsletter Free E-Newsletter
Magazine
  
      2024       2023       2022       2021       2020       2019       2018       2017       2016       2015       2014       2013       2012       2011       2010       2009       2008

LEGAL: Latest Changes in Chinese Environmental Laws (PART 2)
Share to

Latest Changes in Chinese Environmental Laws

PART 2

By Manuel Torres (Managing Partner of Garrigues China) and Rachel Zhou (Corporate Associate)

BT 201707 LEGAL 02


      最近四年内,我国有三项环境法发生了重大变化,这正表明了我国政府在以预防控制的方式方法加强对环境保护监管的力度,对于外国来华企业而言,重视并了解中国相关法律法规以及市场相应的变化是非常重要的。

      继上一期有关法规修订的内容,本期我们将带领大家了解环境法修订的具体情况。首先,环境影响审批的程序将简化。过去环境文件需要提交有关部门重重审批,现在经过修改,这些表格只需要提交即可,审批程序更加简洁,过程也更为容易。其次,环境影响评估不再是项目批准的前提。另外,处罚类型也做出了相应不同的修改。值得注意的是,罚金数额大大增加,目前罚款是项目总投资额的百分之一。

      另外一个大的变化是:制定“环境保护税法”(EPT法)。根据规定,我国将从2018年起征收环境保护税,污染物排放费不再适用。新税法还对纳税人、应纳税污染物等做出了相关规定,对于依法设立的集中污水和生活垃圾处理设施直接排放应税污染物的企业,不需支付税费。一些农业生产排放物以及机动车辆的污染物排放等也可临时豁免。此外,二级扣税机制等相关机制法规的设置也完善了环境法。

      很明显,我国政府已经决定完善环境保护问题的法律法规,使整个环境监管和评估体系对企业更加公平。我们有理由相信,在华企业未来会被更加科学客观地对待。

Over the last four years, three environmental laws have been experiencing great changes which indicate the ambitions of Chinese government to strengthen the protection of the environment by the way of pre control. We believe it is important for any enterprise that would like to develop business in Chinese domestic market to pay attention to those changes as the influence on its daily running is unavoidable.

1. Revision of Environmental Protection Law
(See PART 1 in previous issue of Business Tianjin)
 

2. Revision of Law on Environment Impact Assessment

Law on Environment Impact Assessment is also a concentrated management law formulated by the National People's Congress of China and this law was revised in 2016 and was made effective on September 1st, 2016. The following revised perspectives are worthy of being noticed considering that they have direct influences towards enterprises.
 

BT 201707 LEGAL 03A. Simplifying the environmental impact approval procedure

It is noticed that the environmental impact approval procedure has been simplified.

Previously, if a construction project was under the management of relevant department of industry, the environmental documents shall be submitted to such department of industry for prior approval before submitting to environmental department. Currently, and in this updated version the aforementioned prior procedure was deleted.

Furthermore, in previous version, the environmental impact registration form was also subject to approval of environmental department. While, now according to the modification, such forms only need to be filed and the filing procedure is easier than approval procedure based on our experience.
 

B. No longer the precondition

The updated law says where the environmental impact assessment documents of a construction project have not been submitted for review in accordance with the law or approved upon review by the approval authority, the construction unit shall not start construction of the project, meaning the environmental impact assessment is no longer the precondition of approval of the project.
 

BT 201707 LEGAL 01
C. Specifying the types of administrative penalty

It specifies different types of administrative penalty as follows:
 

(1) Where a construction unit fails to submit the environmental impact report or environmental impact statement for any of its construction projects in accordance with the law or fails to re-submit such environmental impact report or environmental impact statement for approval or submit the said document for review again as required by Article 24 of this Law and starts construction of the project without approval, the competent department for environmental protection above the county level shall order it to stop construction and based on the circumstances of the violation and the consequences thereof, impose on it a fine of between one to five percent of the total investment amount of the project, and may also order it to restore the original conditions before the construction; and the persons directly in charge and others directly responsible in the construction unit shall be subject to administrative sanctions under the law.
 

(2) Where a construction unit starts a construction project with its environmental impact report or environmental impact statement not having been approved or not having been approved again by the original approval authority, it shall be subject to penalties or disciplinary sanctions in accordance with the preceding paragraph.
 

(3) Where a construction unit fails to file the environmental impact form of any of its construction projects for the record, the competent department for environmental protection above the county level shall order to complete the record-filing and impose on it a fine up to 50,000 RMB.
 

(4) Where a construction unit of a marine construction project engages in any unlawful act as stated in this Article, it shall be subject to penalties under the Marine Environment Protection Law of the People's Republic of China.
 

It is noticed that compared to the previous article, the amount of the fine has been increased largely. Currently, the fine is one to five percent of the total investment amount of the project.
 

Corresponding to the filing of environmental impact form, the enterprise may be fined up to 50,000 RMB if it fails to complete the filing. Meanwhile, the enterprise could apply for the supplementary submission of environmental impact documents at the required time limit designated by competent authority as to previous provision if it fails to submit within legal time limit. Currently the supplementary submission was deleted and failure of submission will trigger the imposing of penalty.
 

BT 201707 LEGAL 04
3. Formulation of Law on Environmental Protection Tax

After collection of pollutant discharge fee for about 30 years, China finally promulgated the Environmental Protection Tax Law (“EPT Law”) on December 25th, 2016 under the principle of "replacing fee with tax". Pursuant to EPT Law, environmental protection tax shall be levied from January 1st, 2018, and the pollutant discharge fee shall no longer be applicable.
 

EPT Law is the fifth tax law after the promulgation of the PRC Tax Collection and Administration Law, the PRC Enterprise Income Tax Law, the PRC Individual Income Tax Law and the PRC Motor Vehicle and Vessel Taxes Law.]Environmental protection tax is the 19th category of taxation in China.
 

We set forth below a brief introduction to EPT Law from the perspectives of comparing the difference between pollutant discharge fee regulation and EPT Law and the difference between collection of the environmental protection tax and other major taxes.

hl legalA. Taxpayer

Compared with the Administrative Regulation on Collection of Pollutant Discharge Fee, EPT Law provides for a more specific definition of "taxpayer".

The "taxpayer" under EPT Law means "the enterprises, institutions and other manufacturing and business operators who discharge pollutants directly into the environment within the territory of the PRC and within sea area under the administration of the PRC".
 

This definition retains "the enterprises, institutions and other manufacturing and business operators who discharge pollutants directly into the environment" and adds the geographical limit of "within the territory of the PRC and within sea area under the administration of the PRC" which putting sea area into the scope of jurisdiction.
 

B. Taxable Pollutant

Under this law, the definition of "taxable pollutant" not only keeps the four pollutant categories, including air pollutant, water pollutant, solid waste and acoustic noise, but also provides a technical approach to determine whether certain pollutant belongs to the "taxable pollutant" in the list of taxable pollutants and their equivalent volume annexed to such Law.
 

Furthermore, EPT Law clearly distinguishes taxable activities from nontaxable ones with respect to the discharge of sewage, household refuge and solid waste. In fact, it clarifies that in any of the following circumstances, which are not circumstances of direct emission of pollutants into the environment, the EPT shall not be paid for corresponding pollutants:

(1) Enterprises, entities, other producers and operators that directly emit taxable pollutants into the centralized sewage and domestic waste treatment facilities established by law; or
 

(2) Enterprises, entities, other producers and operators that store or dispose solid wastes in facilities or places that meet the national or local standard of environmental protection.
 

On the contrary, the Administrative Regulation on Collection of Pollutant Discharging Fee provides that pollutant discharge fee is not applicable to discharging waste water into sewage treatment plants and disposal of solid waste since the establishment or renovation of solid waste treatment facilities. EPT Law provides that discharge of taxable pollutants into legally established centralized sewage treatment plants and household refuse treatment plants and storage and disposal of solid waste in treatment facilities that comply with national and local environmental protection standards are not deemed as discharging pollutants directly into the environment and thus are not subject to environmental protection tax. The law further stipulates that if those waste treatment plants then discharge taxable pollutants into the environmental beyond the statutory criteria or the storage or treatment of solid waste by tax payers do not comply with national standards, environmental protection tax shall be levied.
 

BT 201707 LEGAL 05
Additionally, this law also lists the following circumstances as being temporarily exempted:
 

(1) Pollutants discharged from agricultural production (excluding large-scale cultivation industry);
 

(2) Pollutants discharged from transportation machineries, such as motor vehicles, locomotives, off-road mobile machineries, ships and aircrafts, etc;
 

(3) Pollutants discharged from urban sewage and household waste treatment plants, provided they are within the national disposal standard;
 

(4) Solid waste comprehensively utilized by the taxpayer in line with national or local standard of environmental protection; and
 

(5) Other tax-exempt circumstances approved by the State Council.
 

Apparently, provisions of this Law are more scientifically and environmentally friendly.
 

C. Tax Amount and Tax Base

EPT Law imposes restriction on the local government's right to determine the range of the taxable amount. It abandons the previous regulations that "the provincial government may determine the local standard if the national standard is silent" and provides that the local government may make a proposal regarding the tax amount in accordance with the range specified in the List of Tax Categories and Tax Amount and report to the local standing committee of people's congress for its approval. The EPT Law also provides more operational guidelines on the tax base of taxable pollutants, such as specifying that the taxable discharge volume of air pollutant and water pollutants shall be calculated with the converted actual discharge volume and specifying the calculation method and the List of Taxable Pollutants and their Equivalent Volume. Though this converting practice was adopted when calculating pollutant discharge fee in practice, it was not clearly stated in the pollutant discharge fee regulations.
 

D. Tax Deduction

The most attractive part of EPT Law is the two-level tax deduction mechanism applicable to the discharge of air pollutant and water pollutant. Under this mechanism, taxpayers may enjoy 25% discount off on their tax amount if the concentration of their air or water pollutants is 30% lower than the national or local benchmark standard, and 50% discount on the same if the concentration of their air or water pollutants is 50% lower than the national or local benchmark standard. As compared to the 50% discount previously applied to pollutant discharge fee, this two-level mechanism is obviously more effective to reduce pollutant discharge.
 

It is clear that the Chinese government has been determined to perfect its laws and regulations on the environmental protection issues and make the whole environmental regulation and assessment system more sensible and fair for the enterprises. Therefore, we believe, in general, the enterprises would enjoy a more scientific and objective treatment in future.
 

--- END ---

    Subscription    |     Advertising    |     Contact Us    |
Address: Magnetic Plaza, Building A4, 6th Floor, Binshui Xi Dao.
Nankai District. 300381 TIANJIN. PR CHINA
Tel: +86 22 23917700
E-mail: webmaster@businesstianjin.com
Copyright 2024 BusinessTianjin.com. All rights reserved.