1. Income tax preferential treatment for CDM projects
The Ministry of Finance and the State Administration of Taxation jointly issued the "Regulations on Corporate Income Tax Policy Issues for Enterprises Implementing the China Clean Development Mechanism Fund and Clean Development Mechanism Projects" Notice" (Caishui [2009] No. 30), which for the first time clarified several preferential income tax policies for CDM projects in my country, which will further promote the development of the clean development mechanism market in my country.
In order to support the domestic response to climate change at different levels and promote the development and implementation of clean development mechanism projects, my country established the China Clean Development Fund Management Center in 2007, which is responsible for the collection, raising, and management of funds. and use. Regarding the Clean Development Fund, Article 1 of Caishui [2009] No. 30 clearly stipulates that four types of income obtained by the Clean Fund are exempt from corporate income tax, that is, the part of the transfer income of greenhouse gas emission reductions from CDM projects that is turned over to the state, and the part donated by international financial organizations. Fund income, interest income from deposits of fund funds, interest income from the purchase of treasury bonds, and donation income from domestic and foreign institutions, organizations and individuals. It should be noted that the above four types of income are not all sources of clean development funds in my country at present. Other sources of clean funds, such as operating income obtained by fund management centers from fund business, etc., should still pay corporate income tax in accordance with regulations.
2. The preferential corporate income tax policies that enterprises implementing CDM projects can enjoy mainly include two aspects:
First, the income paid to the state by enterprises implementing CDM projects is allowed to be deducted in full before tax. Greenhouse gas emission reduction resources are owned by the Chinese government, and greenhouse gas emission reductions generated by specific CDM projects are owned by the development companies. Therefore, the income derived from the transfer of greenhouse gas emission reductions by CDM projects belongs to the Chinese government. and owned by the business implementing the project. The "Measures for the Operation and Management of Clean Development Mechanism Projects" (Order No. 37 of the National Development and Reform Commission, the Ministry of Science and Technology, the Ministry of Foreign Affairs, and the Ministry of Finance) clarifies the allocation ratio of the greenhouse gas emission reduction transfer amount of different CDM projects between the state and the implementing enterprises, and the fiscal and taxation [2009] Article 2, Paragraph 1 of Document No. 30 stipulates that the portion paid by CDM project implementation enterprises to the state according to the above proportion is allowed to be deducted when calculating taxable income, namely:
1. Hydrofluoride Carbide (HFC) and perfluorocarbon (PFC) projects account for 65% of the transfer income of greenhouse gas emission reductions;
2. Nitrous oxide (N2O) projects account for 65% of the transfer income of greenhouse gas emission reductions. 30% of emissions transfer income;
3. The key areas specified in Article 4 of the "Clean Development Mechanism Project Operation and Management Measures" and clean development mechanism projects such as afforestation projects are greenhouse gas emission reductions. 2% of the transfer income.
Second, enterprises implementing CDM projects can enjoy the preferential policy of “three exemptions and three half reductions” for their income. For enterprises that implement CDM projects such as HFC, PFC and N2O that turn over the income from the transfer of greenhouse gas emission reductions to the state in accordance with the prescribed proportion, Caishui [2009] No. 30 stipulates that the income of the enterprise from the implementation of such CDM projects shall be the first after the project obtains the first Starting from the tax year in which the income from the transfer of emission reductions belongs, the corporate income tax is exempted from the first to the third year, and the corporate income tax is halved from the fourth to the sixth year. The income from enjoying this preferential policy refers to the net income from the greenhouse gas emission reduction transfer income obtained by the enterprise from implementing the CDM project, after deducting the portion turned over to the state, and then deducting the relevant costs and expenses incurred by the enterprise in implementing the CDM project.
It should be noted that enterprises should separately account for the income from CDM projects that enjoy preferential treatment, and reasonably allocate the relevant period expenses. If there is no separate accounting, they shall not enjoy the above preferential corporate income tax policies. In addition, the first CDM transaction occurred in my country in 2005. The current relevant agreement is valid from 2008 to 2012, and the Caishui [2009] No. 30 document will be implemented from January 1, 2007. Therefore, the clean development Mechanism funds and clean development mechanism project implementation enterprises shall adjust their taxable income in 2007 in accordance with the provisions of this document.
3. CDM projects do not involve turnover taxes
The cooperation areas of CDM projects in my country and developed countries involve a variety of methods, such as sanitary landfill and comprehensive recycling of urban domestic waste. Or large-scale afforestation, grassland construction and management, or the use of clean energy such as water conservancy, wind energy and solar power generation.
So, when Chinese companies collect payments from foreign companies or organizations in CDM project cooperation, do they need to levy turnover tax based on the different projects of cooperation between the two parties and based on the form of labor services provided by the Chinese companies in the project? There is currently no clear decision on this. Documentation provisions. However, under the current policy, the payments collected by Chinese enterprises from foreign enterprises or organizations in the implementation of CDM projects do not involve turnover tax.
First, for the payments received by Chinese enterprises from foreign enterprises or organizations in CDM project cooperation, turnover tax cannot be levied in the form of labor services provided by the Chinese enterprises in the project. In the CDM projects cooperated by China and foreign countries, foreign enterprises only provide financial and technical support for the cooperative projects. The purpose of providing funds and technology to Chinese enterprises is only to obtain the greenhouse gas emission reductions generated by the project, not for Obtain labor services provided by Chinese companies engaged in the project. In other words, foreign enterprises are not the recipients of services provided by Chinese enterprises in the CDM projects they cooperate with, so the payments received by Chinese enterprises from foreign enterprises cannot be levied with turnover tax as sales of taxable services. So, should the funds provided by foreign enterprises or organizations be regarded as extra-price fees charged by the enterprise for providing the above-mentioned services and be incorporated into the sales volume of its services to collect turnover tax? In fact, whether it is the "Interim Regulations on Value-Added Tax" or the "Interim Regulations on Business Tax" , which stipulates that the "out-of-price expenses" that should be incorporated into sales tax are all collected from the purchaser, and do not include payments collected from units or individuals other than the purchaser. Therefore, the funds collected by Chinese enterprises from foreign enterprises or organizations cannot be regarded as "extra-price fees" collected for providing turnover tax taxable services and be incorporated into sales for the purpose of collecting turnover tax.
Second, for the payments collected by Chinese companies from foreign companies in CDM projects, turnover tax cannot be levied on the "sale of greenhouse gas emission reductions" project. Although in a legal sense, "greenhouse gas emission reductions" have become a tradable commodity in the international market, according to my country's current turnover tax regulations, they cannot be classified as certain taxable assets for turnover tax. According to the "Business Tax Item Notes", "transferred intangible assets" that are taxable items under business tax include the transfer of land use rights, trademark rights, patent rights, non-patented technology, copyrights, and goodwill. "Greenhouse gas emission reductions" obviously do not Any of the "intangible assets" here. The goods in VAT refer to "tangible movables", and "greenhouse gas emission reductions" are obviously not taxable goods under VAT. Therefore, even if the "greenhouse gas emission reductions" generated by CDM cooperation projects between Chinese and foreign enterprises are regarded as an asset, there is no basis for levying a turnover tax on them according to the current tax law.