China’s SAT Clarifies Tax Treatment towards Mining Services
Nov. 17 – When a taxpayer exploits mineral resources for other entities or individuals, the various services it provides can be subject to different types of taxes, according to a recent announcement by the State Administration of Taxation (SAT).
The “Announcement on Tax Issues Concerning Mineral Resource Exploitation Services Taxpayers Provide for Other Entities and Individuals (SAT Announcement  No.56)” clarifies that the following taxable services a taxpayer provides shall be subject to business tax:
- Mine blasting and perforation
- Surface mining
- Building of shafts and tunnels
The announcement also specified that taxable services more related to goods supply – such as the exploitation, excavation, cutting, crushing, sorting and washing of mineral resources – shall be subject to value-added tax.
Announcement No.56 will take effect on December 1, 2011, and the unsettled taxation issues before the date shall also be handled in accordance with the new regulations.
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