China’s Ministry of Finance, Ministry of Water Resources, and State Taxation Administration jointly issued Notice No. 28 of 2024 outlining the implementation of the water resource tax on 11 October 2024.
Starting 1 December 2024, a pilot water resource tax will replace the current water fee system in China.
China initiated a water resource tax pilot in 2016. In 2019, it was officially included in the Resource Tax Law at varying rates.
Tax rates vary by region in China, with surface water taxed at CNY 0.1-1.6 per cubic metre and groundwater at CNY 0.2-4.0 per cubic metre.
Water resources tax must be declared and paid monthly or quarterly, depending on the tax authorities’ calculations. If a fixed-period payment isn’t feasible, it can be paid according to usage. Agricultural production and water usage exceeding the prescribed limit should be declared and paid annually.
If the taxpayer declares and pays monthly or quarterly, he/she shall file a tax declaration and pay the tax with the tax authority within 15 days from the end of the month or quarter.
If the taxpayer declares and pays on time, he shall file a tax return and pay the tax with the tax authority within 15 days from the date the tax obligation occurs. Annual declarations are due within five months after the year’s end.
