China taxes oil exports by foreign firms

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China will impose a tax on crude oil exports by foreign partners in offshore joint ventures the Ministry of Finance announced yesterday.

As reported in China Daily, the tax – a 5 percent tariff on oil exports – will take effect August 1, but existing contracts will be granted a five-year holiday.

“The move is aimed at saving domestic resources and bringing the policy for foreign companies in line with that for domestic operators,” Gong Jinshuang, a senior analyst at the economic and technology research institute affiliated to the China National Petroleum Corp, told China Daily.

It is not known just how much oil produced by JV agreements is exported every year, but the proportion is probably insignificant when compared to China’s overall production.

China’s crude exports, including those by foreign joint ventures, in the first half of this year were 1.82 million tons, down 39 percent over a year earlier, according to Customs data.