Recently, the Ministry of Finance, the General Administration of Customs and the State Taxation Administration jointly issued the Announcement on Adjusting Consumption Tax Policies for Some Batteries (No. 20 [2026]), making systematic adjustments to the battery consumption tax policy.

Subsequently, the State Taxation Administration issued the Announcement on Matters Concerning the Administration of Battery Consumption Tax Collection (No. 16 [2026]), clarifying relevant collection and administration matters.

Relevant measures under the two announcements will be implemented in phases starting from September 1, 2026. This is the most significant policy revision since the establishment of the battery consumption tax framework in 2015.

To help battery enterprises accurately understand the key points of the policy, the core content is sorted out as follows.

01 Some Batteries Changed from Tax-Exempt to Taxable

The announcement clarifies that starting from September 1, 2026, consumption tax will be levied at a rate of 2% on mercury-free primary batteries, nickel-metal hydride (NiMH) rechargeable batteries (also known as hydrogen-nickel batteries), lithium primary batteries, lithium-ion rechargeable batteries, and all-vanadium redox flow batteries; starting from September 1, 2027, consumption tax will be levied at a rate of 4% on the above battery products.

Starting from April 1, 2027, consumption tax will be levied at a rate of 2% on photovoltaic (PV) cells (also known as solar cells); starting from April 1, 2028, consumption tax will be levied at a rate of 4% on photovoltaic cells.

02 Some Batteries Exempt from Consumption Tax

From September 1, 2026 to December 31, 2028, consumption tax will be exempted for sodium-ion batteries, solid-state batteries, fuel cells, and perovskite solar cells, tandem solar cells and gallium arsenide (GaAs) solar cells among photovoltaic cells.

03 Tax Reduction and Exemption Must Be Based on Test Reports

The announcement clearly stipulates that taxpayers producing or entrusting processing of battery products enjoying the above tax reduction and exemption policies shall comply with the national standards for such products. Products that do not meet national standards or have no national standards shall not enjoy the tax reduction and exemption policies.

Taxpayers shall obtain a test report issued by a testing institution proving that the product complies with the corresponding national standards before the first declaration of consumption tax reduction or exemption for battery products.

The testing institution shall hold a currently valid Certificate of Qualification for Inspection and Testing Institutions (using the China Metrology Accreditation (CMA) logo) legally issued by market supervision authorities at or above the provincial level, and the appendix of the certificate shall include corresponding battery testing items.

04 Specific Requirements for Tax Reduction/Exemption Declaration and Collection Administration

The State Taxation Administration Announcement No. 16 [2026] further refines the collection and administration requirements:

Invoice Code Specification

Battery consumption tax taxpayers selling battery products shall select the "battery" category code in the Classification Code Table for Goods and Services Tax to issue invoices.

Deduction of Paid Tax

For battery products that taxpayers purchase from production enterprises, recover from entrusted processing, or directly import through self-operated or entrusted methods with consumption tax already paid, and are used for continuous production of taxable battery products, taxpayers shall calculate and deduct the consumption tax already paid on raw materials according to regulations, based on VAT special invoices, tax payment receipts (special for withholding and collection), and special customs payment receipts for import consumption tax confirmed through the electronic invoice service platform. The above VAT special invoices and special customs payment receipts for import consumption tax shall be issued on or after September 1, 2026.

Establish Deduction Ledger

Taxpayers shall establish a Battery Tax Deduction Ledger as reference materials for declaring deduction of paid consumption tax.

Test Reports and Detailed Lists

Taxpayers may obtain test reports proving that battery products enjoying the consumption tax reduction and exemption policy comply with corresponding national standards by category, and attach a detailed list of such products after the test report. The product names, specifications and models in the detailed list shall be consistent with accounting records and sales invoice contents. Battery products without test reports shall not enjoy the tax reduction and exemption policy. Taxpayers shall keep test reports, detailed lists and other materials for future reference, and bear corresponding legal liabilities for the authenticity and legality of the materials.

Tax Declaration

Taxpayers producing or entrusting processing of battery products enjoying the tax reduction and exemption policy shall truthfully fill in Schedule 2: Detailed Statement of Current Period Tax Reduction (Exemption) Amount in the Consumption Tax and Additional Surcharge Tax Return when handling consumption tax declaration.

05 Friendly Reminder

Enterprises enjoying the tax reduction and exemption policy must obtain qualified test reports before the first declaration. The testing institution must have CMA qualification and the qualification appendix must include corresponding battery testing items. The detailed list attached after the test report must be consistent with accounting records and sales invoice contents.