The Notice on Import Tax Policies for the Exploration, Development and Utilization of Energy Resources during the 14th Five-Year Plan Period (CGS [2021] No. 17) (hereinafter referred to as "Notice No. 17") jointly issued by the Ministry of Finance, the General Administration of Customs and the State Administration of Taxation, and the Notice on Administrative Measures for Import Tax Policies for the Exploration, Development and Utilization of Energy Resources during the 14th Five-Year Plan Period (CGS [2021] No. 18) (hereinafter referred to as "Notice No. 18") jointly issued by the Ministry of Finance, the National Development and Reform Commission, the Ministry of Industry and Information Technology, the General Administration of Customs, the State Administration of Taxation and the National Energy Administration clarified the import tax policies regarding energy resources from January 1, 2021 to December 31, 2025. For the natural gas imported by qualified projects, relevant import enterprises can apply for VAT refund of natural gas import. This article will introduce the VAT refund policy for LNG imports.
I. Scope of Application
According to Article 4 of the Notice No. 17: The natural gas (including pipeline natural gas and liquefied natural gas, the same below) imported through projects of cross-border natural gas pipelines and imported LNG receiving, storage and transportation devices approved by the National Development and Reform Commission and expansion project of imported LNG receiving, storage and transportation devices approved by provincial governments, the import VAT shall be refunded at a certain proportion.
According to Paragraph 3 of Article 2 of Notice No. 18, from January 1, 2021, for new projects of cross-border natural gas pipelines and imported LNG receiving, storage and transportation devices that meet the provisions of Notice No. 17, as well as new expansion projects of imported LNG receiving, storage and transportation devices approved by provincial governments, after the projects are completed and put into operation, the National Development and Reform Commission and the National Energy Administration shall notify the competent unit of the project and the starting date for enjoying the preferential policies to the Ministry of Finance, the General Administration of Customs and the State Administration of Taxation. Copies of this notice shall also be sent to the Supervision Bureau of the Ministry of Finance, the Development and Reform Commission, the Energy Administration, and the directly affiliated customs offices where the new projects and new expansion projects are located.
II. Refund Proportion
For imported LNG under the long-term trade gas contract signed before the end of 2014 and confirmed by the National Development and Reform Commission, the import VAT shall be refunded at a rate of 70%; for other imported LNG, the import VAT shall be refunded according to the inverted proportion between the import price of the project and the reference value. The specific import time shall be subject to the declaration time listed on the import customs declaration form.
III. Application Materials
The specific application materials include: Confirmation Letter of Imported Natural Gas and Enterprises Enjoying Import Tax Policies for Energy Resources Exploration, Development and Utilization issued by the competent department; When applying for tax refund, an import enterprise shall provide a written report on the application for tax refund and an Application Form for Tax Refund of Imported Goods; The relevant provisions of the Notice of the Ministry of Finance, the People's Bank of China and the General Administration of Customs on Printing and Distributing the Administrative Measures for the Import Taxes Collection and Refund (CY [2014] No. 373) shall be followed to fill in the Statistics of VAT Collection and Refund for Long-term Trade Gas Import and the Statistics of VAT Collection and Refund for LNG (excluding Long-term Trade Gas) Import.
IV. Basic Process
The specific process includes: The import enterprise submits an tax refund application to the customs office at the taxation place-the customs office at the taxation place conducts initial review of the tax refund application materials-the directly affiliated customs office reviews the initial reviewed documents from the customs office at the taxation place and the application materials from the import enterprise-the Supervision Bureau of the Ministry of Finance located at the directly affiliated customs office, performs a final review of the documents from the directly affiliated customs office and the application materials from the import enterprise, and approves the tax refund documents after confirmation-the directly affiliated customs office forwards the approved documents to the customs office at the taxation place-the customs office at the taxation place, upon confirming the accuracy of the documents, issues a Refund of Revenue Certificate to the tax refund enterprise-the state treasury at the taxation place shall review and handle the transfer of tax refund funds.
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