On September 23rd, 2021, SIP Lvse Jiangnan Public Environment Concerned Centre (hereinafter referred to as “PECC”) received a reply from the Kunshan Municipal Taxation Bureau on the violation of tax preferences by one local enterprise, Kunshan Lucheng Waste-to-energy Co., Ltd.. We appreciate the Kunshan Municipal Taxation Bureau for its attention and reply.
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
Kunshan Lucheng Waste-to-energy Co., Ltd. received a penalty notice from Suzhou Ecology and Environment Bureau on December 4th, 2020 (A Notice of Administrative Penalty of Suzhou Ecology and Environment Bureau [2020] No. 65). The enterprise was fined 120,000 yuan by the Suzhou Ecology and Environment Bureau for providing or entrusting hazardous waste to units without business licenses to engage in business activities. See Figure 1
Article 80 of the “Law on the Prevention and Control of Environmental Pollution by Solid Wastes of the People’s Republic of China” clearly stipulates that it is prohibited to provide or entrust hazardous wastes to unlicensed units or other producers and operators for collection, storage, utilization and disposal. Violations will result in fines. See Figure 2
Kunshan Municipal Taxation Bureau failed to stop the refund of preferential VAT immediately because the enterprise did not take the initiative to inform the Kunshan Municipal Taxation Bureau of the penalty information.
On May 7th, 2021, Kunshan Municipal Taxation Bureau received a table of administrative penalties for ecology and environment in Suzhou from the Suzhou Municipal Taxation Bureau, including Kunshan Lucheng Waste-to-energy Co., Ltd., and immediately suspended the acceptance of the company’s immediate levy and refund matters for the current and subsequent periods to which it belonged.
On August 23rd, 2021, Kunshan Lucheng Waste-to-energy Co., Ltd. repaid the value-added tax of more than 2.6 million yuan through the current value-added tax declaration form; at the same time, the Kunshan Municipal Taxation Bureau terminated the enterprise’s eligibility for the refund preference of instant VAT and did not allow this enterprise to enjoy the instant VAT refund policy for 36 months from the month following the issuance of the penalty in accordance with the Article 4 of 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” (Finance and Taxation [2015] No. 78).
Kunshan Lucheng Waste-to-energy Co., Ltd. was punished by environmental protection due to the negligence of choosing a hazardous waste disposal company and was also disqualified from the preferential value-added tax refund for 36 months, which deserves reflection. Whether it is a comprehensive resource utilization enterprise or other industries, when choosing a supplier, they must pay attention to whether the other party has relevant qualifications and environmental performance to avoid losses.