Announcement No. 20 of 2026 by the Ministry of Finance, the General Administration of Customs, and the State Taxation Administration

To further improve the consumption tax system, the following adjustments to the consumption tax policy on batteries are hereby announced:

I. Effective September 1, 2026, a 2% excise tax rate shall apply to mercury-free primary batteries, nickel-metal hydride rechargeable batteries (also known as nickel-hydrogen rechargeable batteries or NiMH batteries), lithium primary batteries, lithium-ion rechargeable batteries, and vanadium redox flow batteries;Effective September 1, 2027, a 4% excise tax rate shall apply to the aforementioned battery products.

II. Effective April 1, 2027, a 2% excise tax rate will apply to photovoltaic cells (also known as solar cells); effective April 1, 2028, a 4% excise tax rate will apply to photovoltaic cells.

III. From September 1, 2026, through December 31, 2028, sodium-ion batteries, solid-state batteries, fuel cells, and—among photovoltaic cells—perovskite cells, tandem cells, and gallium arsenide cells shall be exempt from excise tax.

IV. Taxpayers producing or commissioning the processing of battery products eligible for the aforementioned tax reduction and exemption policies must ensure that such products comply with the relevant national standards. Products that do not meet national standards or for which no national standards exist are not eligible for the aforementioned tax reduction and exemption policies.

Prior to filing their first application for a consumption tax exemption on battery products, taxpayers must obtain a test report issued by a testing institution certifying that the product complies with the relevant national standards.The testing institution must hold a valid “Certificate of Accreditation for Inspection and Testing Institutions” (bearing the CMA logo) issued in accordance with the law by a provincial-level or higher market supervision and administration department, and the appendix to the “Certificate of Accreditation for Inspection and Testing Institutions” must include the relevant battery testing items.

V. Where a taxpayer purchases battery products from a manufacturer, receives them after consignment processing, or directly imports battery products on which excise tax has already been paid—whether through self-operated or consignment arrangements—for use in the continuous production of taxable battery products, the taxpayer is permitted to deduct the amount of excise tax already paid on the raw materials based on the quantity used in production during the current period.

VI. Taxable battery products produced and used by the taxpayer for the continuous production of taxable battery products are exempt from consumption tax; if used for the continuous production of products other than taxable battery products or for other purposes, consumption tax shall be declared and paid at the time of transfer for use.

VII. Except as provided above, other matters concerning the collection and administration of the consumption tax on batteries shall be implemented in accordance with the relevant provisions of the *Interim Regulations of the People’s Republic of China on Consumption Tax* and the *Implementing Rules for the Interim Regulations of the People’s Republic of China on Consumption Tax*.

The “Notice of the Ministry of Finance and the State Administration of Taxation on the Levy of Consumption Tax on Battery Coatings” (Cai Shui [2015] No. 16) andthe “Notice of the Ministry of Finance and the State Administration of Taxation on the Levy of Consumption Tax at the Import Stage on Battery Coatings” (Cai Guan Shi [2015] No. 4) are inconsistent with the provisions of this Announcement, the provisions of this Announcement shall prevail.

This is hereby announced.

Ministry of Finance, General Administration of Customs, State Taxation Administration

July 16, 2026