Promulgation Authorities:  Standing Committee of the National People's Congress

Promulgation Date:  2018.10.26

Effective Date:  2018.10.26

Validity Status:  valid

Vessel Tonnage Tax Law of the People's Republic of China (Amended in 2018)

Vessel Tonnage Tax Law of the People's Republic of China (Amended in 2018)

(Adopted at the 31st Session of the Standing Committee of the Twelfth National People's Congress on 27 December 2017 and amended in accordance with the Decision on Revisions to the Wildlife Protection Law of the People's Republic of China and other 14 Laws adopted at the 6th Session of the Standing Committee of the Thirteenth National People's Congress on October 26, 2018)

Article 1    Any vessel entering a port in the People's Republic of China from an overseas port (hereinafter referred to as the "taxable vessel") shall pay vessel tonnage tax (hereinafter referred to as "vessel tonnage tax") pursuant to this Law.

Article 2    Items and rates for vessel tonnage tax shall be implemented pursuant to the "Table of Items and Rates for Vessel Tonnage Tax" attached hereto.

Article 3    Preferential tax rates and normal tax rates shall be implemented for vessel tonnage tax.

Preferential tax rates shall apply to taxable vessels of Chinese registry, as well as taxable vessels whose country (region) of registry has entered into a treaty or agreement with the People's Republic of China which contains a clause on mutual grant of MFN vessel tax.

Normal tax rates shall apply to other taxable vessels.

Article 4    Vessel tonnage tax shall be levied and collected in accordance with the net tonnage of the vessel and the licence period for vessel tonnage tax.

The person-in-charge of a taxable vessel may, at the time of declaring tax each time, opt to collect a vessel tonnage tax licence of a certain period in accordance with the "Table of Tax Items and Tax Rates for Vessel Tonnage Tax".

Article 5    The vessel tonnage tax payable amount shall be computed by multiplying the net tonnage of the vessel with the applicable tax rate.

Article 6    The Customs shall be responsible for levying and collection of vessel tonnage tax. The Customs shall issue a payment receipt for vessel tonnage tax collected.

Upon payment of vessel tonnage tax or provision of security deposit by the person-in-charge of a taxable vessel, the Customs shall issue a vessel tonnage tax licence in accordance with the period of the licence collected by the person-in-charge.

Article 7    When a taxable vessel completes embarkation formalities at the entry port, it shall declare and pay tax to the Customs and apply for a vessel tonnage tax licence, or submit its vessel tonnage tax licence for inspection (or apply for verification of electronic information of the vessel tonnage tax licence). When a taxable vessel completes disembarkation formalities at the departure port, it shall submit its vessel tonnage tax licence for inspection (or apply for verification of electronic information of the vessel tonnage tax licence).

When the person-in-charge of a taxable vessel collects a vessel tonnage tax licence, he/she shall provide the following documents to the Customs:

(1) certificate of registry of the vessel, or the proof of deposit of certificate of registry of vessel issued by the maritime authorities; and

(2) vessel tonnage certificate.

Where a taxable vessel docks, due to force majeure, at a location where a Customs is not established, the person-in-charge of the vessel shall forthwith report to the Customs nearby, and shall declare and pay tax to the Customs pursuant to the provisions following elimination of the force majeure reason.

Article 8    The time of occurrence of obligation for vessel tonnage tax shall be the date on which the taxable vessel enters the port.

Where the taxable vessel does not depart from the port after the vessel tonnage tax licence expires, it shall apply for a new vessel tonnage tax licence, and pay vessel tonnage tax from the date following the expiry of the previous licence period.

Article 9    The following vessels shall be exempted from vessel tonnage tax:

(1) a vessel whose tax payable amount is below RMB50;

(2) a non-loaded vessel which enters a port for the first time after obtaining vessel ownership overseas via purchase, gift, inheritance etc;

(3) a vessel which does not load or unload passenger or cargo within 24 hours after expiry of the vessel tonnage tax licence;

(4) a non-motorised vessel (excluding non-motorised barge);

(5) a fishing boat or breeding fishing boat;

(6) a vessel which is being evacuated, quarantined, repaired, modified, operation terminated or dismantled, and has not loaded or unloaded passenger or cargo;

(7) a vessel used exclusively or requisitioned by the army or the armed police force;

(8) a vessel used by the police;

(9) a vessel owned by a foreign embassy or consulate in China, a representative office of an international organisation in China and their related personnel that are exempted from tax pursuant to the provisions of the laws; and

(10) any other vessels stipulated by the State Council.

The tax exemption provisions of item (10) of the preceding paragraph shall be filed by the State Council with the Standing Committee of the National People's Congress for record.

Article 10    Where a taxable vessel falls under any of the following circumstances during its vessel tonnage tax licence period, the Customs shall extend the vessel tonnage tax licence period in accordance with the actual number of days for which the scenario occurs:

(1) it is being evacuated, quarantined, repaired or modified, and has not loaded or unloaded passenger or cargo; or

(2) requisitioned by the army and the armed police force.

Article 11    Where a vessel complies with the provisions of item (5) to item (9) of the first paragraph of Article 9 and Article 10 of this Law, it shall provide a proof document or use relationship proof document issued by the maritime authorities, fishing vessel authorities or agencies to state the basis and reason for tax exemption or extension of vessel tonnage tax licence period.

Article 12    The person-in-charge of a taxable vessel shall settle tax payment within 15 days from issuance of vessel tonnage tax payment receipt by the Customs. Where the tax is not fully paid by the deadline, a late payment fine based on 0.005% per day of the tax in arrears shall be imposed for the period from the due date to the date of full payment.

Article 13    Where a taxable vessel is approved by the Customs to complete declaration in advance and has completed disembarkation and embarkation formalities before it arrives at the port, the person-in-charge of a taxable vessel shall provide to the Customs a security deposit corresponding to the vessel tonnage tax payable pursuant to the law; after the taxable vessel arrives at the port, it shall declare and pay tax to the Customs pursuant to the provisions of this Law.

The following properties and rights may be used for provision of security deposit:

(1) Renminbi or freely-convertible currencies;

(2) money orders, promissory notes, checks, bonds, or certificates of deposit;

(3) letter of guarantee issued by a bank or a non-bank financial institute; and

(4) other properties and rights recognised by the Customs pursuant to the law.

Article 14    Where there is a change in the net tonnage of a taxable vessel during the vessel tonnage tax licence period due to repair or modification, the vessel tonnage tax licence shall continue to be valid. When a taxable vessel completes disembarkation and embarkation formalities, it shall provide the proof document that the vessel has been repaired or modified.

Article 15    Where there is a change in the applicable tax rate for a taxable vessel during the vessel tonnage tax licence period due to adjustment of tax item or tax rate or change in registry of the vessel, the vessel tonnage tax licence shall continue to be valid.

Where there is a change in registry of the vessel, resulting in change of applicable tax rate, the taxable vessel shall, at the time of completing disembarkation and embarkation formalities, provide proof document on change of registry of the vessel.

Article 16    Where the vessel tonnage tax licence is damaged or lost before expiry, the vessel shall apply to the issuing Customs in writing for issuance of a duplicate copy of the vessel tonnage tax licence, and there is no need to top up tax payment.

Article 17    Upon discovery of under-levying of tax or omitted levying, tax payment shall be made retrospectively within one year from the date on which tax is due for payment by the taxable vessel. However, where the under-levying of tax or omitted levying is due to a violation by the taxable vessel, the Customs may recover the tax within three years from the date on which tax is due for payment by the taxable vessel, and shall impose a late payment fine based on 0.005% per day of the under-levied or omitted tax with effect from the date on which the tax is due for payment.

Upon discovery of over-levied tax, the Customs shall notify the taxable vessel within 24 hours to complete the formalities for refund and shall compute interest based on current deposit accrued by a bank for the same period.

Upon discovery of over-levied tax, the taxable vessel may, within three years from the date of tax payment, apply to the Customs in writing for refund of the excess tax paid, plus interest based on current deposit accrued by a bank for the same period; the Customs shall investigate within 30 days from acceptance of the application for tax refund, and notify the taxable vessel to complete the formalities for refund.

The taxable vessel shall complete the relevant formalities for refund within three months from receipt of the notification stipulated in the second paragraph or third paragraph of this Article.

Article 18    A taxable vessel which commits any of the following acts shall be ordered by the Customs to make correction within a stipulated period, and be subject to a fine ranging from RMB2,000 to RMB30,000; where the taxable vessel refuses to pay or under-pay tax, a fine ranging from 50% to 500% of the unpaid or under-paid tax shall be imposed, provided that the fine shall not be lower than RMB2,000:

(1) failure to declare and pay tax or obtain a vessel tonnage tax licence pursuant to the provisions; or

(2) failure to submit its vessel tonnage tax licence for inspection pursuant to the provisions (or apply for verification of electronic information of the vessel tonnage tax licence) and provide other proof document(s).

Article 19    Vessel tonnage tax, late payment fine, and fine shall be computed in Renminbi.

Article 20    Matters pertaining to levying and collection of vessel tonnage tax not covered under this Law shall be handled pursuant to the provisions of the relevant laws and administrative regulations on administration of tax collection.

Article 21    The following terms used in this Law and the Appendix "Table of Tax Items and Tax Rates for Vessel Tonnage Tax" shall be defined as follows:

Net tonnage shall mean the net tonnage stated on the tonnage certificate issued, or authorised to issue, by the government of the country (region) of registry of the vessel.

Non-motorised vessel shall mean a vessel which is not equipped with an engine and is driven by an external force.

Non-motorised barge shall mean a non-motorised vessel registered as a barge with the vessel registration authorities.

Fishing boat or breeding fishing boat shall mean a vessel registered with the fishing vessel authorities of the People's Republic of China as a fishing boat or breeding fishing boat.

Tugboat shall mean a special operation vessel used for dragging (pushing) vessels.

Vessel tonnage tax licence period shall mean the period computed in calendar years or days.

Article 22    This Law shall come into force on 1 July 2018, repealing simultaneously the Provisional Regulations of the People's Republic of China on Vessel Tonnage Tax promulgated by the State Council on 5 December 2011.

Appendix (Only Title Translated):

Table of Items and Rates for Vessel Tonnage Tax