On November 24, 2025, the Ministry of Finance and the State Taxation Administration jointly issued the “Announcement on Clarifying the Implementation Caliber of Resource Tax Related Policies” (MOF & STA Announcement No. 12 of 2025). This document will officially take effect on December 1, 2025, and addresses the issue of which product category the resource tax should be levied on when light rare earth ore is processed into rock-type rare earth concentrate and when ionic rare earth ore is processed into mixed rare earth oxide.
Announcement on Clarifying the Implementation Caliber of Resource Tax Related Policies
Ministry of Finance and State Taxation Administration Announcement No. 12 of 2025
In accordance with the provisions of the Resource Tax Law of the People’s Republic of China, the implementation caliber of relevant resource tax policies is hereby announced as follows:
I. Circumstances Where Resource Tax Is Not Payable
(1) Taxable products confiscated or seized by administrative organs, supervisory organs, judicial organs, procuratorial organs at all levels, as well as public institutions and organizations authorized by laws and regulations to perform public affairs management functions in accordance with relevant national laws and regulations, are not subject to resource tax.
(2) Sand, stone, clay and other mineral products mined within the approved land occupation scope of an engineering construction project and directly used for backfilling the project itself do not constitute exploitation of taxable resources and are not subject to resource tax.
II. Applicable Tax Items
(1) Condensate oil mined by taxpayers shall be subject to resource tax under the crude oil tax item. Condensate oil refers to the liquid phase component condensed due to temperature and pressure changes during gas field development or natural gas development in oil fields.
(2) Mixed light hydrocarbons from oil and gas fields separated by taxpayers from mined crude oil shall be subject to resource tax under the crude oil tax item; mixed light hydrocarbons from oil and gas fields separated from mined natural gas shall be subject to resource tax under the natural gas tax item. The definition of mixed light hydrocarbons from oil and gas fields shall be implemented with reference to SY/T 7831 “Mixed Light Hydrocarbons from Oil and Gas Fields”.
(3) When taxpayers use tailings as raw material to re-select and recover specific mineral components, resource tax shall be levied according to the tax item corresponding to the specific mineral component. When taxpayers use tailings as raw material for resource utilization to produce graded shaped sand and gravel particles, resource tax shall be levied under the sand and gravel tax item. Where relevant provinces, autonomous regions and municipalities directly under the Central Government exempt or reduce resource tax on taxpayers exploiting tailings in accordance with Article 7 of the Resource Tax Law of the People’s Republic of China, those provisions shall prevail.
III. Taxable Objects
(1) Coal mined by taxpayers that has not been processed or has only undergone crushing and gangue removal (gangue diameter above 50 mm), as well as screened coal, low calorific value coal, etc. after screening and classification, shall be subject to resource tax as raw coal ore. Clean coal, middlings, coal slime, etc. produced after taxpayers remove ash and gangue from mined coal through physical and chemical processes such as washing, dry selection and air selection shall be subject to resource tax as coal beneficiation products.
(2) Rock-type rare earth concentrate (including bastnaesite concentrate, monazurite concentrate and mixed rare earth concentrate, etc.) produced by taxpayers through washing and other primary processing of mined light rare earth ore shall be subject to resource tax as light rare earth beneficiation products.
(3) Rare earth material liquid, rare earth carbonate, rare earth oxalate produced by taxpayers from mined ionic rare earth ore through ion exchange principle and other processes, and mixed rare earth oxide produced through burning, oxidation and other processes, shall be subject to resource tax as medium and heavy rare earth beneficiation products.
(4) Chloride salts, sulfate salts, nitrate salts, etc. produced by taxpayers from salt lake brine and salt well brine through physical processes such as evaporation crystallization, precipitation, solvent extraction, ion exchange and membrane separation shall be subject to resource tax as salt beneficiation products.
IV. Tax Calculation Basis
(1) When taxpayers sell taxable products exempt from VAT or use taxable products for continuous production of non-taxable products exempt from VAT, the tax basis for resource tax shall be determined based on the sales amount excluding VAT.
(2) Transportation and miscellaneous expenses deductible from the taxpayer’s sales amount and the purchase amount of externally purchased taxable products that may be deducted shall both exclude VAT.
(3) When taxpayers mix and sell externally purchased taxable products with self-produced taxable products and also mix and wash-select externally purchased taxable products with self-produced taxable products, they shall separately account for the purchase amount (quantity) of externally purchased taxable products and deduct it according to regulations; if separate accounting is not possible, deduction shall be made according to mixed sales.
(4) When taxpayers only mix and sell externally purchased taxable products with self-produced taxable products, or only mix and wash-select externally purchased taxable products with self-produced taxable products, they may calculate and deduct the amount in one lump sum in the period of purchase of the externally purchased taxable products; any amount insufficiently deducted in the current period may be carried forward to the next period for deduction.
V. Related-Party Transactions
Where the price of taxable products sold by a taxpayer to a related entity is obviously lower than the price at which the related entity sells the same type of taxable products to other non-related entities in the same period without justifiable reason, the competent tax authority may adjust the taxpayer’s taxable product sales amount in accordance with the relevant provisions of Article 3 of the “Announcement of the Ministry of Finance and State Taxation Administration on the Implementation Caliber of Issues Concerning Resource Tax” (MOF & STA Announcement No. 34 of 2020).
Where a taxpayer sells raw ore to a related enterprise and the related enterprise processes it into beneficiation products for sale, and the raw ore sales amount is obviously lower than the amount obtained by deducting reasonable processing costs and profits from the beneficiation product sales amount of the related enterprise to the outside without justifiable reason, the competent tax authority may determine the taxpayer’s raw ore sales amount based on the amount obtained by deducting reasonable costs and profits from the beneficiation product sales amount of the related enterprise to the outside.
Justifiable reasons in the above circumstances mainly include:
(1) The taxpayer implements government-guided prices or government-set prices determined by the price authorities, medium- and long-term transaction prices determined under the prescribed price formation mechanism, as well as statutory price intervention measures and emergency measures;
(2) The related entity adds a markup to the taxable products within a reasonable range to ensure its own operating costs and profits;
(3) The price of taxable products sold by the related entity to the outside includes transportation and miscellaneous expenses;
(4) Other justifiable reasons determined by the competent tax authority.
VI. Self-Use for Continuous Production of Taxable Products
A taxpayer mining or producing taxable products and using them for continuous production of taxable products refers to the taxpayer using the taxable products as direct materials to produce final taxable products that constitute the entity of the final taxable products.
VII. Calculation Method for Tax Reduction and Exemption
(1) When a taxpayer calculates and determines the sales amount or sales quantity of tax-exempt or tax-reduced items according to the output proportion method, the specific calculation formula is as follows:
Taxable product sales amount (sales quantity) of the current period tax-exempt or tax-reduced items = Total taxable product sales amount (sales quantity) of the current period × (Current period taxable product output of tax-exempt or tax-reduced items ÷ Total taxable product output of the current period)
The total taxable product sales amount of the current period refers to the sales amount after deducting transportation and miscellaneous expenses and deducting the purchase amount of externally purchased taxable products. The total taxable product sales quantity of the current period refers to the sales quantity after deducting the purchase quantity of externally purchased taxable products.
(2) When a taxpayer uses taxable products of tax-exempt or tax-reduced items for circumstances where resource tax should be paid but there is no sales amount, the sales amount of the tax-exempt or tax-reduced items shall be calculated and determined according to the average sales price method. The specific calculation formula is as follows:
Taxable product sales amount of the current period tax-exempt or tax-reduced items = Self-used quantity of taxable products of the current period tax-exempt or tax-reduced items × Average sales price of taxpayer’s taxable products in the current period
VIII. Tax Reduction and Exemption Management
(1) Where a taxpayer mining or producing the same taxable product qualifies for two or more resource tax reduction policies, unless otherwise specified otherwise, only one policy may be selected for implementation. The same taxable product refers to taxable products for which the taxpayer meets any tax reduction or exemption condition and separately accounts for sales amount or sales quantity.
(2) When taxpayers sell taxable products of tax-exempt or tax-reduced items, they shall retain for future reference VAT invoices and other lawful and valid vouchers issued for the sale of such taxable products; when taxpayers determine the sales amount or sales quantity of taxable products of tax-exempt or tax-reduced items according to the output proportion method or average sales price method, they shall retain for future reference output ledgers and other materials of the tax-exempt or tax-reduced taxable products.
(3) Taxpayers declaring enjoyment of the preferential policy for depleted mines shall also retain for future reference copies of the Mining License, Mineral Resource Reserve Verification Report (or Oil and Gas Proven Recoverable Reserve Calibration Report) and other relevant materials. The criteria for determining a depleted mine may be selected by the taxpayer according to remaining recoverable reserves or remaining mining years, but once selected, it may not be changed. If the mine’s recoverable reserves increase and no longer meet the depleted mine conditions, the taxpayer shall stop enjoying this preferential policy, and may not enjoy this preferential policy again when the mine re-enters the depleted period.
For mines using remaining recoverable reserves as the depleted period criterion, the cumulative sales quantity enjoying this tax preferential policy shall not exceed 20% of the originally designed recoverable reserves. The calculation formula for remaining recoverable reserves of a mine is:
Remaining recoverable reserves = Recoverable reserves – Cumulative mined quantity
Where the originally designed recoverable reserves of a mine are unclear, the depleted period shall be based on remaining mining years. For mines using remaining mining years as the depleted period criterion, the cumulative duration enjoying this tax preferential policy shall not exceed five years. The calculation formula for remaining mining years of a depleted mine is:
Remaining mining years = Remaining recoverable reserves ÷ [Most recently approved or verified annual production capacity × Reserve backup coefficient × (1 – Ore dilution rate)
The criteria for determining the depleted period for oil and gas fields and water-gas mines shall be implemented with reference to the above provisions. Among them, for oil and gas fields enjoying the depleted mine preferential policy, the individual oil and gas field (reservoir) development unit under the mining enterprise shall be used as the unit for determination, and its designed recoverable reserves shall be determined according to technically recoverable reserves.
(4) Taxpayers declaring enjoyment of the coal backfill mining preferential policy shall also retain for future reference copies of the Mining License, coal resource backfill mining utilization plan, above-ground and underground engineering comparison diagram, third-party technical assessment report, backfill mining ledger and other relevant materials. Where taxpayers have installed metering devices on the backfill mining face, the actually metered weighing quantity shall be used as the coal quantity replaced by backfill mining. Where no metering device is installed, the coal quantity replaced by backfill mining shall be calculated according to the current period injected backfill material volume and the filling-to-mining ratio.
Coal backfill mining refers to the coal mining technology in which, as the mining face advances, gangue, fly ash, construction waste and special backfill materials are filled into goaf or separation zones, mainly including solid material backfill such as gangue, paste material backfill, high-water material backfill, grouting backfill and water-preserved mining implemented by backfill method, etc.
IX. Time When Tax Liability Arises
The time when the tax liability arises for taxpayers selling taxable products shall be determined according to the following provisions:
(1) For sales of taxable products by direct payment settlement, regardless of whether the taxable products have been delivered, the tax liability arises on the day when the sales payment is received or the voucher for claiming the sales payment is obtained; if an invoice is issued first, it is the day when the invoice is issued.
(2) For sales of taxable products by credit sale or installment payment settlement, the tax liability arises on the payment date stipulated in the contract; if no written contract is signed or the written contract does not specify the payment date, the tax liability arises on the day when the taxable products are delivered.
(3) For sales of taxable products by advance payment settlement, the tax liability arises on the day when the taxable products are delivered.
(4) For sales of taxable products by collection acceptance and entrusted bank collection, the tax liability arises on the day when the taxable products are delivered and collection procedures are completed.
(5) For consignment sales of taxable products, the tax liability arises on the day when the consignment sales list from the consignee is received.
X. Implementation Time
This announcement shall take effect from December 1, 2025. Matters that occurred before this date but have not yet been processed shall be implemented in accordance with the provisions of this announcement, and matters that have already been processed shall not be adjusted.
