ANNOUNCEMENT 22 Dec 2017

December 22nd, 2017 - The Chinese government published an update to its policy which guarantees domestic importers a certain price on natural gas.

NUMBER OF INTERVENTIONS

2

  • 1 harmful
  • 0 neutral
  • 1 liberalising

SOURCE

PRC Ministry of Finance, December 22nd, 2017. (财关税〔2017〕41号)
http://gss.mof.gov.cn/zhengwuxinxi/zhengcefabu/201801/t20180130_2801159.html

Inception date: 01 Jul 2017 | Removal date: 31 Mar 2018

Import incentive

On December 22nd, 2017, the Chinese State Administration of Taxation reduced the target domestic sales price for imported natural gas. To incentivise gas imports, the Chinese government rebates the VAT on imported natural gas when the import price exceeds the desired domestic price.

Through its decree, the Chinese government altered the sales price of natural gas as follows:

  • July-September 2017:
    • LNG: from USD 4.40 to 4.26 per gigajoule (CNY 28.34 to 27.49)
    • Pipeline: from 0.155 to 0.150 USD per cubic metre (CNY 1.00 to 0.97)
  • From October 2017 onwards:
    • LNG: from USD 4.26 to 4.14 per gigajoule (CNY 27.49 to 26.64)
    • Pipeline: from 0.150 to 0.146 USD per cubic metre (CNY 0.97 to 0.94)

The measure is effective retroactively for the relevant periods. Excess VAT paid on prior imports will be credited accordingly.

AFFECTED SECTORS

 
120

AFFECTED PRODUCTS

 
271111 271121
Inception date: 01 Jul 2017 | Removal date: open ended

Tax or social insurance relief

In addition to the above, the Chinese natural gas rebate policy simultaneously consitutes a discriminatory treatment of unknown users of the natural gas imported through the scheme, as imported LNG benefitted from the rebate.

 
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