Energy service companies in China will enjoy tax exemptions as of Jan 1 this year, The Ministry of Finance announced on its website on Thursday.

Eligible energy service companies will be exempted from business tax.

If these companies transfer goods—which are taxable under value-added tax law—to energy-using companies, they can be exempted from value-added tax.

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Energy service companies will also be exempted from income tax from the first year they earn income to the third year. The tax rate for these companies is half of the normal rate of 25 percent, from the fourth year to the sixth.

An energy service company is a business that provides energy management services to an energy user.

Those providing contracted services are entitled to tax exemptions.