China’ s foreign-oriented oil taxation system has, from the beginning, been based upon the positive experiences of other oil-producing countries and has incorporated common international practices. The system has been perfected over decades. It of fers more incentives than other oil-producing countries in the following four aspects: (1) Income tax has a “wide tax base and low tax rate”; (2) VAT levies a low tax rate on ma- China’s foreign-oriented oil taxation system has, from the beginning, been based upon the positive experiences of other oil-producing countries and has incorporated common international practices. The system has been perfected over decades. It of fers more than than other oil -producing countries in the following four aspects: (1) Income tax has a “wide tax base and low tax rate”; (2) VAT levies a low tax rate on ma-