SAT Adjusts Consumption Tax on Fuel Oil

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Sept. 8 – The State Administration of Taxation has eliminated consumption tax on fuel oil when used for the production of ethylene and other chemicals.

Caishui [2010] No. 66, issued on August 20, stipulates that from January 1, 2010 to December 31, 2010, domestic fuel oil used for the production of ethylene, aromatics and other raw materials for chemical products shall be exempt from consumption tax, while imported fuel oil will enjoy consumption tax return. Fuel oil that is not used in production but resold will be subject retroactively to consumption tax.

Consumption tax supplements shall be refunded for chemical enterprises that purchase the duty-free fuel oil for sale. In addition, the consumption tax levied from the duty-free enterprises shall be returned from January 1 through August 20.

According to the notice, enterprises with fuel oil production of ethylene, aromatics and other chemical products accounting for 50 percent or more of the total the production of fuel oil shall enjoy the preferential policies stipulated in the notice.

For more information or advice regarding taxes in China, please contact Dezan Shira & Associates at