China Redirects VAT Refund Support from Onshore Wind to Offshore Wind and Nuclear Power

Mechanism

Announcement 2025 No. 10 (财政部 海关总署 税务总局公告2025年第10号) is a joint fiscal-tax circular that rewrites the VAT treatment of electricity sold by wind and nuclear generators, effective 1 November 2025:

• Offshore wind (new support): taxpayers selling self-produced electricity

generated from offshore wind installations receive an immediate 50% VAT refund ("增值税即征即退50%") for a defined window, 1 November 2025 through 31 December 2027.

• Onshore wind (support withdrawn): the announcement explicitly repeals the

prior immediate-refund circular for wind power, Cai Shui [2015] No. 74 ("《财政部 国家税务总局关于风力发电增值税政策的通知》（财税〔2015〕74号）"), effective 1 November 2025 — ending the immediate-refund treatment onshore wind operators had relied on for a decade.

• Nuclear (grandfathered vs. cut off): plants already commercially operating

before 31 October 2025 continue under the pre-existing 2008 VAT arrangement unchanged. Plants approved by the State Council before 31 October 2025 but not yet commercially operating move to a 50% collected-then-refunded ("先征后退") VAT rebate for the first ten years after commercial start-up. Nuclear projects approved on or after 1 November 2025 get no VAT refund mechanism at all.

Net effect: Beijing is using the VAT lever to steer capital and margin support within the power-generation buildout — favoring offshore wind (a higher-cost, higher-strategic-value segment versus mature onshore wind) and honoring the existing nuclear approval pipeline, while cutting mature onshore wind loose and signalling no further nuclear VAT largesse for future approvals.

Downstream implications

• Onshore wind operators (a mature, largely cost-competitive segment) lose a

decade-old fiscal cushion, which should compress margins for utilities and IPPs with heavy onshore wind exposure and could slow marginal onshore wind capacity additions.

• Offshore wind developers gain a two-year-plus margin subsidy window, likely

accelerating offshore build-out — relevant to turbine/nacelle/foundation suppliers and to rare-earth permanent-magnet demand (offshore turbines disproportionately use direct-drive PM generators).

• The nuclear cut-off for post-Nov-2025 approvals removes a fiscal sweetener

just as China's approval pace for new reactors has been running near-record — future approvals will have to clear on economics alone, without the VAT rebate crutch enjoyed by the current pipeline.

Open questions

• Whether provincial-level top-ups or green-electricity certificate schemes

partially offset the onshore wind refund's removal.

• Whether the offshore-wind 50% refund gets extended past its 31 Dec 2027

sunset once the current window is tested against installed capacity targets.