"In the past year alone, the total amount of electricity price subsidies for the two power plants that have not yet reached the accounts has exceeded 130 million yuan, but when calculating various taxes and fees, income has been confirmed according to the online electricity price containing subsidies, and all taxes and fees are paid in full. Among them, in the case of enterprise income tax alone, in 2018 we will be charged more than 10 million yuan. Subsidies have not yet reached the accounts, but tax payment is a step ahead, resulting in tight operating funds of enterprises, Ding Mou, the head of a renewable energy power generation enterprise in Anhui Province, complained about this.
In fact, Ding Mou's experience is widespread in China's renewable energy power generation enterprises. Why is the renewable energy tariff subsidy delayed and delayed, while the corresponding tax has to be paid first? State subsidy, which belongs to the category of VAT exemption, why do power generation enterprises pay tax in the same amount when they receive it?
Subsidies are not paid
Tax cannot be paid in advance.
"When Calculating Electricity bills, only the portion of the electricity price (including desulfurization, denitrification and dust removal) of coal benchmark pole can be set up. We do not know when the remaining part of the state subsidy will be given, but when calculating the tax, the income will be confirmed according to the subsidized electricity price." Ding told reporters. What he said is the principle of "accrual basis" which is generally followed by domestic renewable energy power generation enterprises.
"Accrual basis" simply means that although no money has been received, if the power-responsibility relationship is confirmed, the tax should be paid first. Wang Hongtao, Director of Finance and Budget Department of Huaneng Jilin Power Generation Co., Ltd., told reporters that China's current tax law recognizes "accrual basis" in the collection of enterprise income tax and VAT. Wang Hongtao admitted that such a treatment did increase the financial pressure of power generation enterprises.
Although it is recognized by the tax law, for renewable energy power generation enterprises, the resulting pressure is also visible. Wugang, chairman of Xinjiang Jinfeng Science and Technology Co., Ltd. has calculated this account to reporters: Take the wind power industry as an example, the annual subsidy given by the state to the wind power industry is between 70 billion and 80 billion yuan, and the subsidy usually lags behind 2-3 years. If the current accrual basis is changed to the cash basis, that is, to receive renewable subsidies. Energy and electricity price subsidy is the time of tax obligation, which can reduce the cost of capital of the whole industry by about 14 billion yuan every year.
Fiscal subsidies are tax-free
Subsidies are taxable
In addition to the confusion about the system arrangement of paying taxes first, during the interview, many operators of renewable energy power generation enterprises still have another question: why should VAT be levied as a central financial subsidy for renewable energy price subsidies?
According to the Announcement of the State Administration of Taxation on the Issues Relating to VAT of Central Financial Subsidies issued in 2013, the central financial subsidies obtained by taxpayers do not belong to the taxable income of VAT and do not levy VAT. After the announcement, the State Administration of Taxation also gave a special interpretation: "In order to facilitate the actual operation of the subsidy issuing departments, some of the central financial subsidies are paid directly to the seller, some are supplied to the buyer first, and then transferred by the buyer to the seller. We believe that no matter what method is adopted, the actual purchase price paid by the purchaser is the amount after deducting the central financial subsidy from the original price. According to the current Provisional Regulations on Value Added Tax, the sales amount is the total price and extra-price charged by the taxpayer to sell goods or taxable services to the purchaser. Taxpayers receive subsidies from the central government through the central government, so they do not belong to VAT taxable income and do not levy VAT.
But also in 2013, the Ministry of Finance issued the Circular on the Implementation of Electricity Subsidy Policy for Distributed Photovoltaic Power Generation, which clearly pointed out that, according to the Renewable Energy Law, the subsidies for photovoltaic power plants, large-scale wind power generation, geothermal energy, ocean energy, biomass energy and other renewable energy generation subsidies are targeted. It is a power grid enterprise. In other words, renewable energy power generation companies do not receive subsidies directly, but indirectly through grid companies, because subsidies are paid directly to grid companies.
Wang Hongtao pointed out that although according to the policy of the State Administration of Taxation, the subsidy fund does not need to pay VAT, in practice, renewable energy power generation enterprises still pay VAT to the subsidy amount.
Preferential policies have expired
Follow-up implementation is inconclusive
In fact, the state has introduced some preferential policies for the value-added tax paid by renewable energy power generation enterprises.
In September 2013, the Ministry of Finance and the State Administration of Taxation jointly issued the Notice on the Policy of Value Added Tax on Photovoltaic Power Generation, proposing that from October 1, 2013 to December 31, 2015, taxpayers should adopt the policy of 50% VAT levy and 50% refund when they sell their own electricity products using solar energy. In July 2016, the two ministries sent a second letter to extend the implementation period of this preferential policy until 31 December 2018.
For the above preferential policies, Wang Mou, an accountant of photovoltaic enterprises, believes that for most ground photovoltaic power plants, it will take about five years for the cancellation tax of input tax and electricity fee income to be deducted. "In the first five years of power station integration, most enterprises do not need to pay VAT. By this time, it is possible to enjoy preferential policies only when grid-connected projects are completed in 2013 and before. But the outbreak of domestic photovoltaic growth in recent years, that is to say, a large number of photovoltaic power plants may not enjoy the benefits of VAT, the policy has expired.
Entering 2019, the implementation period of the policy of "50% VAT on demand and 50% VAT refund" has expired.
