Since 2020, among the five green tax reports released by PECC, the third report focuses on the enjoyment of tax preferences for waste incineration enterprises. Click for details: Research Report of Green Taxation (3) The Research Report of Environmental Taxation of National Waste Incineration Enterprises

By retrieving the IPE database, the reasons for environmental penalties for Zhoushan Wangneng Environmental Protection and Energy Co., Ltd.[1] are as follows: On May 20th, 2021, when the law enforcement officials of Zhoushan Ecology and Environment Bureau conducted law enforcement inspection on the company and retrieved data, they found that the No. 2 boiler of this company was marked as an oven during the period from 21:45 on May 17th, 2021 to 2:09 on May 18th, 2021, and the furnace temperature was lower than 850 ℃, but the boiler operator was still throwing household waste into the boiler. The company did not follow the marking rules and falsely marked it. According to Article 13(1) of “Regulations on the Application and Administration of Automatic Monitoring Data for Household Waste-to-Energy Incineration Plants” (Order No. 10 of the Ministry of Ecology and Environment) and Article 99(3) of “Air Pollution Prevention and Control Law of the People’s Republic of China” ), the company was fined 290,000 yuan. The date of the administrative penalty was imposed on July 12th, 2021.

Zhoushan Wangneng Environmental Protection and Energy Co., Ltd. has enjoyed the policy of immediate refund of VAT on comprehensive utilization of resources for three consecutive years (2018-2020) due to comprehensive utilization of waste for power generation[2]. The current environmental penalty will affect the enterprise’s subsequent enjoyment of this preferential policy.

The Official Website of Zhejiang Provincial Taxation Bureau

In 2018, the comprehensive utilization of household waste was 349,871.4 tons.

In 2019, the comprehensive utilization of household waste was 406,213.8 tons.

In 2020, the comprehensive utilization of household waste was 536,130.10 tons.

According to the “Notice of the Ministry of Finance and the State Administration of Taxation on Printing and Distributing the Catalogue of Preferential Value-Added Tax for Products and Labor Services for Comprehensive Utilization of Resources”, if taxpayers who have enjoyed the policy of immediate refund of value-added tax as stipulated in this notice are punished (except for a warning or a single fine of less than 10,000 yuan) for violating the laws and regulations on taxation and environmental protection, the enterprise shall not enjoy the immediate VAT refund within 36 months from the month following the environmental penalty. Zhoushan Waneng Environmental Protection and Energy Co., Ltd. shall not enjoy the preferential policy for 36 months from August 2021.

In addition, by checking the 2020 annual report of Wangneng Environment Protection Co., Ltd.[3], as a subsidiary of Wangneng Environment, Zhoushan Wangneng Environmental Protection and Energy Co., Ltd. has passed the high-tech enterprise audit in 2020 and is subject to corporate income tax at a rate of 15% during the validity period of the high-tech enterprise status.

Then comes the problem. If the environmental penalty of 290,000 yuan is a major safety and quality accident or serious environmental violation[4], it will affect the enterprise’s qualification of high-tech enterprise.