In order to promote the development of the PPP model, the Ministry of Finance has issued the Notice of the Ministry of Finance on Issuing the Operational Guidelines of the Government and Social Capital Cooperation Model (for Trial Implementation) (Caijin [2014] No. 113), the Opinions of the State Council on Strengthening the Management of Sexual Debt of Local Governments (Guofa 201443), and the Notice of the Ministry of Finance on the Relevant Issues on the Popularization and Application of the Government and Social Capital Cooperation Model (Caijin [2014] No. 113). Notice" (Caijin [2014] No. 76), the introduction of the above policies fully proves that the government attaches importance to and recognizes the direction of public-private cooperation in the public **** economy, encourages social capital to participate in the provision of public **** products and public **** services and obtain a reasonable return, and vigorously promotes the PPP model of project financing. But what tax incentives can be enjoyed in terms of PPP project construction? Through the study, the tax preferential policies of China's PPP projects are sorted out and summarized as follows:
I. Tax preferential policies during the operating period of the PPP project
(A) preferential policies on enterprise income tax
The investment and operating income realized by engaging in the following PPP projects enjoys the following preferential policies on enterprise income tax.
1. Reduced or exempted enterprise income tax policy: enjoying the enterprise income tax policy of three exemptions and three halves
According to Article 27 (2) and (3) of the Enterprise Income Tax Law of the People's Republic of China (Decree No. 63 of the President of the People's Republic of China), the Regulations for the Implementation of the Enterprise Income Tax Law of the People's Republic of China (Decree No. 512 of the State Council of the People's Republic of China), Article 87, and the Regulations on Implementation of the Enterprise Income Tax Law of the People's Republic of China (Decree No. 512 of the State Council of the People's Republic of China), the State Council of China has issued a number of preferential policies. No. 512 of the State Council of the People's Republic of China), Article 87 of the Circular of the Ministry of Finance and the State Administration of Taxation on Issues Relating to the Implementation of the Preferential Catalog of Enterprise Income Tax for Public **** Infrastructure Projects (Cai Shui [2008] No. 46) and the Circular of the State Administration of Taxation on the Preferential Issues Relating to the Implementation of the Enterprise Income Tax for Public **** Infrastructure Projects with Key State Supports (Guoshifa [2009] No. 80), the provisions that the investing enterprise engaging in the "Public *** Infrastructure Projects Enterprise Income Tax Preferential Catalogue" stipulated in the ports and terminals, airports, railroads, highways, urban public **** transportation, electric power, water conservancy and other projects. Income from qualified environmental protection, energy and water conservation projects such as public *** sewage treatment, public *** garbage treatment, comprehensive development and utilization of biogas, energy-saving and emission reduction technological transformation, seawater desalination, etc., shall be exempted from enterprise income tax for the first to the third year, and reduced by half for the fourth to the sixth year, starting from the taxable year in which the project obtains the first production and operation income. The starting time for enjoying tax incentives for new public **** infrastructure projects and qualified environmental protection, energy-saving and water-saving projects is the first production and operation income.
In addition, Article 1 of the Supplementary Circular of the Ministry of Finance and the State Administration of Taxation on Issues Concerning Preferential Policies on Enjoyment of Enterprise Income Tax for Public **** Infrastructure Projects (Cai Shui [2014] No. 55) also stipulates that the enterprises investing in and operating the public **** infrastructure projects that comply with the conditions and standards stipulated in the "Catalogue of Preferential Enterprise Income Tax for Public **** Infrastructure Projects" shall adopt the principle of one-time approval and sub-batch ( For example, if the construction of wharf, berth, terminal, runway, road section, generator set, etc. is approved in one batch and constructed in separate batches (e.g. wharf, berth, terminal, runway, road section, generator set, etc.), enterprises that meet the following conditions at the same time may calculate their income on a batch by batch basis and enjoy the preferences of "three exemptions and three half-reduces" for the enterprise income tax: (1) the different batches are independent of each other spatially; (2) each batch possesses its own function of generating income; ( (3) Accounting for each batch as a unit, calculating income separately, and reasonably apportioning period expenses.
2, investment credit enterprise income tax: 10% of the investment amount of special equipment to offset the year's enterprise income tax payable
According to the "People's Republic of China *** and the State Enterprise Income Tax Law" (Decree No. 63 of the President of the People's Republic of China *** and the State of China), Article 34 stipulates that: the enterprise's investment amount of the acquisition of special equipment used for environmental protection, energy-saving and water-saving, and safe production can be tax credited according to a certain percentage (trust). The tax credit can be applied in a certain proportion (Trust Weekly Chapter). The so-called tax credit refers to the fact that if an enterprise acquires and actually uses the special equipment for environmental protection, energy saving and water conservation and safety production as stipulated in the "Preferential Catalogue of Enterprise Income Tax for Special Equipment for Environmental Protection", "Preferential Catalogue of Enterprise Income Tax for Energy Saving and Water Conservation Special Equipment", and "Preferential Catalogue of Enterprise Income Tax for Special Equipment for Safe Production", 10% of the amount of the investment in the special equipment may be credited from the tax payable by the enterprise for the current year. If the credit is insufficient in the current year, the credit can be carried forward in the next five tax years. The investment amount of the special equipment, according to the provisions of Article 2 of Cai Shui [2008] No. 48, refers to the total price of the invoice price and tax for the purchase of the special equipment, but does not include the value-added tax refunded in accordance with the relevant provisions of the value-added tax, as well as the cost of equipment, transportation, installation and debugging, and so on. The tax payable for the year, according to the provisions of Article 3 of Cai Shui [2008] No. 48, refers to the balance of the enterprise's taxable income for the year multiplied by the applicable tax rate, after deducting the amount of tax reduced or exempted in accordance with the Enterprise Income Tax Law, the State Council's relevant tax incentives and the provisions of the Tax Transitional Incentives. Enterprises enjoying the investment credit enterprise income tax preferences shall actually purchase and put into use their own special equipment for environmental protection, energy and water conservation, safe production, etc.; if an enterprise purchases the above special equipment and transfers or leases it out within five years, it shall stop enjoying the enterprise income tax preferences and make up for the enterprise income tax that has already been credited. According to the relevant provisions of Cai Shui [2008] No. 48, the investment amount of special equipment purchased by an enterprise with self-financing funds and bank loans can be credited against the amount of enterprise income tax payable in accordance with the provisions of the Enterprise Income Tax Law; the investment amount of special equipment purchased by an enterprise with financial allocations shall not be credited against the amount of enterprise income tax payable. If an enterprise acquires and actually puts into application the special equipment which has already started to enjoy the tax preferences, and if it transfers or leases out the equipment within five tax years from the date of acquisition, it shall stop enjoying the enterprise income tax preferences in the month when the special equipment ceases to be used, and make up for the already credited enterprise income tax. The transferee of the transfer can offset the current year's enterprise income tax payable in accordance with 10% of the investment amount of the special-purpose equipment; if the current year's tax payable is insufficient to offset the tax payable, it can be carried forward for offset in the next five tax years.
According to the Circular of the State Administration of Taxation on the Issues Relating to the Credit and Exemption of Enterprise Income Tax on Investment in Special Equipment for Environmental Protection, Energy Saving, Water Saving and Safe Production (Guo Shui Han [2010] No. 256), if a taxpayer purchases and actually uses special equipment within the scope of the catalog and obtains VAT invoices, and the VAT input tax is allowed to be credited, the amount of its investment in the special equipment no longer includes If the VAT input tax is allowed to be deducted, the investment amount of the special equipment shall be the total amount of price and tax stated in the VAT special invoice. If the enterprise obtains ordinary invoices for the purchase of specialized equipment, the investment amount of the specialized equipment shall be the amount stated in the ordinary invoices.
3. Enterprise Income Tax Policies on Dividend Distribution of the Project Company during the Operation Period
According to the provisions of the Enterprise Income Tax Law of the People's Republic of China (Decree of the President of the People's Republic of China No. 63), the distribution of dividends of the project company during the operation period enjoys the following preferential policies on enterprise income tax:
1. Involved in the distribution of dividends during the operation period, if the project company is exempted from enterprise income tax if it distributes dividends among domestic resident enterprises; domestic resident enterprises are required to withhold and pay 20% individual income tax on behalf of the shareholders if they distribute dividends to natural person shareholders.
2. If the project company has overseas shareholders, the cross-border distribution of dividends to overseas non-resident enterprises is generally subject to 10% withholding tax. If the overseas non-resident enterprises have entered into bilateral tax treaties with China, the preferential withholding tax rate under the tax treaty arrangement can be applied under certain conditions.
(II) Preferential policies on value-added tax (VAT)
Engaged in PPP projects involving comprehensive utilization of resources and environmental protection, such as sewage treatment, garbage treatment and wind power, they can enjoy the following preferential policies on VAT.
1. Sales of self-produced reclaimed water are exempted from value-added tax (VAT)
The Circular of the Ministry of Finance and the State Administration of Taxation on the VAT Policies for the Comprehensive Utilization of Resources and Other Products (Cai Shui [2008] No. 156) stipulates in Article 1, Item (1) that: the sales of self-produced reclaimed water are exempted from VAT. The so-called reclaimed water refers to water sources such as effluent from sewage treatment plants, industrial drainage water (mine water), domestic sewage, and infiltration (filtration) liquids from garbage treatment plants, etc., which are recovered, treated appropriately to reach a certain standard of water quality and reused within a certain scope. Recycled water should be consistent with the Ministry of Water Resources, "recycled water quality standards" (SL368-2006) of the relevant provisions.
2, sewage treatment services are exempt from value-added tax
According to the "Ministry of Finance, State Administration of Taxation on the comprehensive utilization of resources and other products of value-added tax policy notice" (Cai Shui [2008] No. 156) Article 2, the sewage treatment services are exempt from value-added tax. Sewage treatment refers to the business of processing and treating sewage to meet the water quality standards set forth in the relevant provisions of GB18918-2002.
3, the policy of immediate refund of value-added tax (VAT)
(1) The policy of immediate refund of 100% of VAT on the sale of electricity or heat produced by using garbage as fuel
According to the provisions of Article 3 (2) of Cai Shui [2008] No. 156, the policy of immediate refund of VAT on the sale of electricity or heat produced by using garbage as fuel is implemented. The amount of garbage accounted for no less than 80% of the fuel used for power generation, and the production emissions meet the GB13223-2003 1st period standards or the relevant provisions of GB18485-2001. The so-called garbage refers to municipal garbage, crop residue, bark waste, sludge, and medical waste.
(2) the sale of gangue, coal sludge, stone coal, oil mother shale as fuel for the production of electricity and heat, the implementation of value-added tax that is 50% refund policy
According to the provisions of Cai Shui [2008] No. 156, the fourth (d) and (e) of the provisions of the sale of the following self-produced goods to realize the implementation of the policy of value-added tax that is 50% refund policy: to coal gangue, coal sludge, stone coal, Electricity and heat produced by using coal gangue, coal sludge, stone coal, oil shale as fuel. Coal gangue, coal sludge, stone coal, oil mother shale accounted for no less than 60% of the proportion of fuel for power generation; the use of wind power production of electricity.
(3) Implementation of the policy of immediate 100% refund of VAT on the sale of self-produced electricity or heat power
According to the provisions of the Circular of the Ministry of Finance and the State Administration of Taxation on the Adjustment and Improvement of Value-added Tax Policies on the Comprehensive Utilization of Resources for Products and Services (Cai Shui [2011] No. 115), the policy of immediate 100% refund of VAT is implemented on the sale of the following self-produced goods: namely (1) Electricity or heat produced by utilizing waste heat and pressure generated in the process of industrial production. (2) Electricity, heat and fuel produced from kitchen waste, animal and poultry manure, rice husk, peanut shell, corn cob, oil tea husk, cottonseed husk, three leftovers, sub-small fuelwood, oily wastewater, organic wastewater, sludge generated from wastewater treatment, and oil sludge (sludge) generated from the oil extraction process of the oil field, including biogas generated from fermentation using the above resources.
4, waste treatment, sludge treatment and disposal services are exempted from value-added tax (VAT)
The Circular of the Ministry of Finance and the State Administration of Taxation on the Adjustment and Improvement of Value-added Tax Policies on Comprehensive Utilization of Resources Products and Services (Cai Shui [2011] No. 115) adjusts and improves the VAT policies on products for the comprehensive utilization of resources of agricultural and forestry residues, and increases the applicability of some of the products and services for the comprehensive utilization of resources. VAT preferential policies. Among them, the tax incentives related to the operation of PPP projects related to garbage treatment are: exemption of VAT on garbage treatment and sludge treatment and disposal labor.
Two, the tax treatment of PPP projects: project expiration handover stage
Since the project company in the PPP project obtains a government concession license for a certain period of time, after the expiration of the concession period, the expiration of the operation period, all the assets are handed over to the government free of charge, and essentially do not have the ownership of the facilities, due to the fact that the tax basis of its intangibles has been amortized during the concession period, it also No tax treatment.