So polluted, but still enjoy preferential tax policies and "high" honor

On April 28, 2021, the Ministry of Ecology and Environment released a typical case of "The Circular Economy Industrial Park in Yongfeng County, Ji'an City, Jiangxi Province is severely polluted, and the masses have strongly reflected", which attracted the attention of Green Jiangnan.

The article mentioned that the relevant local departments were worried that the enterprises would be subject to administrative penalties and could not enjoy the tax rebate policy, which affected the local business environment, resulting in only inspections, no penalties, and continuous relaxation of regulatory requirements for polluting enterprises... Named by the Supervision Bureau. The two companies involved in the park, Jiangxi Longtianyong Nonferrous Metals Co., Ltd. (hereinafter referred to as Longtianyong Company) and Jiangxi Xiangsheng Environmental Protection Technology Co., Ltd. (hereinafter referred to as Jiangxi Xiangsheng), caused serious environmental pollution and caused concern.

Through the environmental big data retrieval of the blue map, it is found that Longtianyong Company has several environmental supervision records since 2014. The closest one is the two mass reporting information in 2018, mainly reporting that Longtianyong Company has long-term discharge wastewater directly into Enjiang (first-class protected areas for water sources), exhaust gas pollution, and large quantities of hazardous wastes being shipped out. However, after the investigation, the relevant departments of Yongfeng County only ordered the enterprises to make rectifications within a time limit and demanded to strengthen management and avoid outstanding problems such as illegal sewage discharge. However, Jiangxi Xiangsheng has not found any regulatory punishment records in the blue map database so far.

In April 2021, the inspection team of the fourth central ecological and environmental protection inspection team found that the environmental pollution of enterprises in the circular economy industrial park in Yongfeng County was serious. Long Tianyong Company has illegally built 11 coal-fired reverberatory furnaces that were phased out by the state, which are used for the production of non-ferrous metals such as recycled silver and lead. For hazardous wastes such as slag, the mixed discharge of rain and sewage in the factory area, running and dripping are serious problems, and the overflow of hazardous waste warehouse cleaning wastewater, desliming wastewater, circulating cooling water, etc. enters the rainwater pipe network for external discharge...

In addition, Green Jiangnan also found that Jiangxi Xiangsheng is a subsidiary of Xiamen Zhongchuang Environmental Protection Technology Co., Ltd. (Zhongchuang Environmental Protection, 300056) and is a key pollutant discharging unit. The names of the main pollutants and characteristic pollutants of Xiangsheng were disclosed, and all pollutants were indirectly discharged and did not exceed the standard.

As early as the beginning of 2021, when Green Jiangnan screened the "List of VAT Immediate Refunds for Comprehensive Utilization of Resources in Jiangxi Province in 2019", it found that Long Tianyong Company and Jiangxi Xiangsheng were both on the tax refund list.

In addition, according to the Qichacha website, these two companies are high-tech enterprises, as shown in Figures 7 and 8. After the enterprise is recognized as a high-tech enterprise, it can enjoy the preferential income tax reduction and exemption and the honor of "high enterprise" by the taxation department.

According to the 2020 annual report of Zhongchuang Environmental Protection, the tax preferences enjoyed by the subsidiary Jiangxi Xiangsheng were disclosed in the report. Among them, the value-added tax is reduced by 90% and included in the total income of the year; in terms of income tax, Jiangxi Xiangsheng obtained the "High-tech Enterprise Certificate" on August 13, 2018, that is, the income tax is paid at the tax rate of 15%.

Enterprises must comply with relevant laws and policies when applying for preferential value-added tax and corporate income tax. According to the "Notice of the Ministry of Finance and the State Administration of Taxation on Printing and Distributing the Catalogue of Value-Added Tax Preferential Catalogues for Comprehensive Utilization of Resources Products and Labor Services" (Cai Shui [2015] No. 78), "Those who have enjoyed the VAT refund policy stipulated in this notice have Taxpayers who are punished (except for warnings or a single fine of less than 10,000 yuan) for violating laws and regulations on taxation and environmental protection shall not enjoy the value-added tax specified in this notice within 36 months from the month following the issuance of the punishment decision. According to the requirements of the Ministry of Science and Technology, the Ministry of Finance, and the State Administration of Taxation "Administrative Measures for the Recognition of High-tech Enterprises" (Guoke Fahuo [2016] No. 32), "there has been no major safety or major quality problems within one year before the enterprise applies for accreditation. Accidents or serious environmental violations”, which means that enterprises must meet the legal compliance of the environment and safety while reporting, and must not have major environmental pollution problems or accidents. In May 2020, the Jiangxi Provincial Department of Science and Technology issued the "Notice on Further Doing a Good Job in the Management of High-tech Enterprise Certification", which also mentioned that environmental violations of enterprises affect the identification and tax refund of high-tech enterprises.

Under the guidance of relevant policies, Green Jiangnan maintains close cooperation with tax authorities to help tax authorities identify the environmental performance of enterprises, encourage enterprises to increase information disclosure independently, and do a good job in energy conservation and emission reduction. Up to now, many enterprises have been charged value-added tax, environmental protection tax and late payment fines by tax authorities due to environmental protection penalties. See the Green Tax Report for details. However, there are still some enterprises. Due to the relaxation of the regulatory authorities on their serious environmental violations, some polluting enterprises continue to pollute the environment while enjoying tax incentives.

It is understood that the inspection team will further investigate and verify the relevant situation, and Green Jiangnan will continue to pay attention to the follow-up progress.