ANNOUNCEMENT 26 Dec 2014

December 26th, 2014 - 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 State Administration of Taxation, December 26th, 2014. (财关税〔2014〕67号)
http://www.chinatax.gov.cn/n810341/n810765/n1465977/n1465997/c1671541/content.html

Inception date: 01 Jun 2014 | Removal date: 30 Sep 2015
Still in force

Import incentive

On December 26th, 2014, the Chinese State Administration of Taxation raised 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.

By raising the target price, imports are less incentivised, hence the red classification of this intervention.

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

July-September 2014:

  • LNG: from USD 5.11 to 5.71 per gigajoule (CNY 31.45 to 35.14)
  • Pipeline: from 0.181 to 0.202 USD per cubic metre (CNY 1.11 to 1.24)

From October 2014 onwards:

  • LNG: from USD 5.71 to 6.31 per gigajoule (CNY 35.14 to 38.82)
  • Pipeline: from 0.202 to 0.223 USD per cubic metre (CNY 1.24 to 1.37)

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

AFFECTED SECTORS

 

AFFECTED PRODUCTS

 
Inception date: 01 Jun 2014 | Removal date: 30 Sep 2015
Still in force

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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