What's the matter with the state consumption tax? How do businesses respond?

China Coatings Network
: January 26, 2015, the Ministry of Finance, the State Administration of Taxation jointly issued a message: "On the battery,
coatings
the imposition of consumption tax notice", the text number "Fiscal Tax (2015) No. 16", Specific content is as follows:
provinces, autonomous regions, municipalities directly under the Central Government, the planned single-listed municipal finance department (bureau), the State Administration of Taxation, Xinjiang Production and Construction Corps Finance Bureau:
to promote energy conservation and environmental protection, approved by the State Council, from February 1, 2015 on the battery, paint consumption tax. The relevant matters are heeded as follows:
First, the battery, paint included in the scope of consumption tax collection (see annex for specific tax item notes), in the production, commissioned processing and import links, the applicable tax rate is 4%.
2. Consumption tax is waived on mercury-free primary batteries, metal hydride nickel batteries (also known as "nickel hydride batteries" or "nickel hydride batteries"), lithium-ion batteries, lithium-ion batteries, solar cells, fuel cells and all-hydrant liquid-flow batteries.
the consumption tax on lead batteries by December 31, 2015; As of January 1, 2016, a consumption tax will be levied on lead batteries at a rate of 4%.
exempt from consumption tax on coatings containing volatile organic compounds (VOLATILE Organic Compounds, VOCs) containing less than 420 g/L under construction conditions.
addition to the above-mentioned provisions, other matters relating to the collection and administration of consumption tax on batteries and coatings shall be carried out in accordance with the Interim Regulations of the People's Republic of China on Consumption Tax and the Regulations on the Implementation of the Interim Regulations on Consumption Tax of the People's Republic of China.
Annex 1: Battery Tax Collection Scope Note
Annex 2: Paint Tax Collection Scope Note
State Administration of Taxation of the Ministry of Finance
January 26, 2015
January 27, 2015, the notice was published on the official website of the Ministry of Finance and in the press. The Ministry of Finance and the State Administration of Taxation, while announcing to the public, promptly informed the China Coatings Industry Association of the concern, asked the China Coatings Industry Association to immediately forward the notice. On January 27th, the China Coatings Industry Association published the notice almost simultaneously on the association's official website. After the announcement of this notice, the relevant personnel of The China Coatings Industry Association received
numerous
calls from
coating enterprises and inspection agencies to inquire about the relevant details. From the consultation content, we are at a loss as to how to levy the paint consumption tax, showing that the appearance of the consumption tax on the future business impact of enterprises and the difficulties brought about by most of the confusion and unknown. Because the China Coatings Industry Association has been working with national ministries to formulate a paint consumption tax policy, the content of the notice has a comprehensive understanding, so the content of the notice for accurate interpretation, for your reference.
in order to promote energy conservation and environmental protection. The consumption tax on paints was proposed by the Department of Policy and Regulation of the Ministry of Environmental Protection, which has been implementing environmental economic policies for several years, and green taxes are part of environmental economic policies. Because the haze is related to VOC, because the paint contains VOC, because the NDRC industry adjustment guidance directory provides for "restriction of the production of solvent-based paints", the Ministry of Environmental Protection, the Department of Political and Legal Affairs to the Ministry of Finance, the Department of Taxation and the State Administration of Taxation recommended the collection of solvent-based coatings consumption tax,
water-based coatings
not levied. The China Coatings Industry Association's recommendation to levy oil from upstream solvents, or from a sub-sector first pilot levy, has not been adopted. Most companies worry that the purpose of the levy is to save energy and protect the environment? Or is it purely for taxation?
included in the scope of consumption tax collection is approved by the State Council. According to the Constitution, the right to collect taxes should belong to the National People's Congress, but in 1984 and 1985 the National People's Congress had two authorizations, the right to collect taxes was assosted to the State Council and relevant ministries. The silent expectations of paint enterprises and coatings industry, whether from the point of view of following the legal logic, or from the practical need to end the right to tax, the NPC should repeal the tax authorization legislation and recover the tax right.
will impose a consumption tax on coatings as of February 1, 2015. On the one hand, in the second half of 2013, the Ministry of Environmental Protection, the Ministry of Finance, the General Administration of Taxation jointly held the first meeting on paint consumption tax, the proposed end of 2104 on the introduction of solvent-based paint consumption tax, due to construction thinning, commissioned processing, curing agents, starting point and other issues, repeated discussions and modifications, delayed to February 1, 2015. But February 1st is a hasty time. On the other hand, before or after February 1, 2015, coating enterprises may, in accordance with the requirements of the local tax department, send their own products to qualified third-party testing institutions certified by the State (Certification Commission Accreditation Committee), issue inspection reports, tax departments in accordance with the inspection report documents to confirm which products exceed the starting point, should be levied consumption tax. If it is sent for inspection after February 1, after the inspection results are confirmed, the consumption tax will be calculated from February, and the enterprise will pay or recover the consumption tax; The enterprise's annual type inspection report sheet is considered valid.
coating refers to a class of liquid or solid material applied to an object surface that can form a solid coating film with protection, decoration or special properties. Coatings are composed
main film-forming
, secondary film-forming substances, etc. The scope of collection is defined as grease, natural resins, phenolic resins, asphalt, alcoholic resins, amino resins, nitros, filtered ethylene resins, ole resins, acrylic resins, polyester resins, epoxy resins, polyurethane resins, elemental organics, rubbers, cellulose, other film-forming categories and other 17 categories.
a separate resin, curing agent, thin material is not levied, coating definition of auxiliary film substances are not levied. Because resins, curing agents involved in many other industries, the composition of rare materials solvent oil, refined oil has been levied consumption tax, the collection of VOC consumption tax, only for the paint products themselves, and do not double tax. However, enterprises will be resin, curing agents, thin materials added to the paint mixing parts for coating construction, consumption tax is to calculate the levy. Not collected in these 17 categories, such as inorganic sioxane, zinc and so on. Other film-forming tax departments are not well defined, is still a vague concept, in the specific collection, need to consult industry organizations or experts.
shall be levied in the production, commissioned processing and import links. The object of collection is mainly paint production enterprises, commissioned processing also belongs to the production enterprises, the paint circulation and construction links do not levy consumption tax. In other words, paint sales companies, paint transportation companies, coating enterprises do not levy consumption tax, paint raw materials production enterprises do not levy consumption tax. Global
network to learn
foreign paint production enterprises with the same brand imports to China to levy a consumption tax. Need to be further clear a few points: First, only the processing fee of commissioned processing and OEM form of in-processing how to distinguish? Is it all accepted? Second, after domestic production, large barrels to small barrels of sub-packing enterprises are levied? Is there a difference between changing a trademark and not changing a trademark when you sub-pack? Third, there are already tariffs on imports, is the consumption tax levied a duplicate levy?
to determine the object of collection, the paint industry will change dramatically: sales will flow to the circulation link, foreign companies imported into China's paint will mostly be broken down into resins, slurry, B components.
applicable tax rate is 4%. Explained as the tax department according to the paint production enterprises factory sales of 4% of the consumption tax, after confirming that the VOC of the product is suitable for the scope of collection, sales are based on the enterprise issued a non-tax sales invoice. 4% how the Ministry of Finance determines is not clear, probably by reference to the paint industry in 2013 sales, average price, average profit margin; May also be to adapt to the battery industry or other industries determined; It may also be calculated the total amount of industry tax determined, such as the paint industry according to the annual sales of 400 billion yuan, a year can be levied in the paint industry 16 billion yuan, according to 60% of the collection rate, can also be levied about 10 billion yuan per year.
first, on the concept of VOC. The VOC adopts the definition of the Chinese coatings industry: any organic compound with an initial boiling point below or equal to 250 degrees C under the 101.3kPa standard pressure. This concept is only temporary in the Ministry of Environmental Protection, because the Ministry of Environmental Protection has not yet a unified standard, other industries VOC concept is different, there are 260 degrees C, there is photochemical reaction, there is saturated steam pressure, there are carbides. The Global Coatings Network understands that the Ministry of Environmental Protection is planning to develop a unified standard, but ministries consider the VOC concept of the coatings industry to be the most backward. According to the concept of 250 degrees C, alcohol esters 12 we can rest assured that alcohol, acetone is not exempt, toxicity does not affect the amount of collection, MIR and ozone concentration produced in the air is irrelevant, alcohol and benzene in the face of consumption tax is equivalent, haze and tax linkage is not so strong.
second, about the construction state. Because the construction status of the coating and the VOC in the tank is difficult to draw an equal sign, but the tank good supervision, the construction state there is no effective regulatory measures. Although the state can establish standards and supporting regulations, the paint production enterprises must be labeled on the packaging paint VOC content and construction dilution ratio, as one of the basis for tax inspection, but it will take time. "Construction state", will become a means of corporate tax avoidance, will become an hourglass of taxation, will become the inspection agency sampling method of confusion, because enterprises in the regulations before the introduction of the standard "thinning the appropriate amount" is not out of place.
third, about the starting point. Coatings containing less than 420g/L are exempt from consumption tax. At first, the Ministry of Environmental Protection, the Department of Political and Legal Affairs recommended that all solvent-based coatings levy a consumption tax, water-based coatings do not levy, but the China Coatings Industry Association believes that this is contrary to the industrial structure adjustment guidance catalog "encourage high solid sub-paint" the original intention, the three bureaus on the convening of industry experts, some experts listed Foreign cases, including the 1990 U.S. Air Clean-Up Act (CAA) and its amendments to limit the VOC (after thinning) of coatings to 420g/L (excluding water), the Treasury Department seized on this advice and reported it to the State Department for approval. This leads to the problem of thinning to the construction state; Lead to the problem of consumption tax on water-based coatings, and water-based coatings in the detection of VOC to deduct moisture; The late proposed gradient tax rates, gradient VOCs and annual recurring were not adopted, e.g. 420g/L, 3%, 500g/L, 5%, 600g/L, 7%, etc.; For example, 2% in 2015, 3% in 2020, 4% in 2025, no more than 4%, etc.
fourth, about voC detection methods. The sample was tested by gas chromatography, and if no organic compound with a boiling point greater than 250 degrees C was detected, the volatile content tested was the VOC
product; If an organic compound with a boiling point greater than 250 degrees C is detected, the organic compounds with a boiling point greater than 250 degrees C in the sample are qualitatively identified and quantitatively analyzed. The content of organic compounds with a boiling point greater than 250 degrees C in the sample is deducted from the volatile content, i.e. the VOC
product. This detection method has a large detection error, poor reproducible, lower VOC value, the greater the error; Due to the difference between instrument, operator, VOC type and absolute value, sometimes more than 20% relative error can occur, VOC absolute error can reach 20% ×420 x 84g/L; In this way, 500g/L and 340g/L sometimes don't make much difference.
fifth, on VOC and solids. According to the current standard, not every coating has VOC indicators, but each coating has solid points or corresponding indicators. The content of VOC can be calculated by the results of the test report using solids and density.
Because of the dispersion of the paint industry, the irregularity of production and the absence of supervision, the controllability of taxation is not strong, the control is extremely difficult, the result of taxation can only be a small number of large-scale regulated enterprises tax, and a large number of non-standard enterprises are difficult to collect. Because tax or not directly led to a larger cost difference, regulate the competitiveness of enterprises will decline, can only selectively exit part of the market, to give way to those who do not pay taxes and have a cost advantage of enterprises, the result may block or delay the process of industry integration, so that some large-scale, high-polluting enterprises have more room for survival than before, the industry again appeared a greater state of chaos, such results, not only can not achieve the purpose of reducing emissions, and may even make post-tax emissions higher than before tax (for reference only). Global Coatings Network recommends that quality inspection, industry and commerce and tax departments strengthen the supervision of test results, in addition to type inspection, delivery inspection requirements, the construction site to carry out flight spot checks, and strive to test the authenticity and validity of the results.
all provinces, municipalities directly under the Central Government and above paint testing institutions, as long as there are relevant qualifications, as long as they have VOC testing capabilities, can issue a legally binding test report, used to determine whether consumption tax can be levied. There are mainly the following testing institutions:
N.S. Building Materials Testing Center
National Building Materials Quality Supervision and Inspection Center
Chemical Industry Marine Coatings Quality Supervision and Inspection Center
Heilongjiang Provincial Quality Supervision and Inspection Research Institute
Shanxi Provincial Product Quality Supervision and Inspection Research Institute
Chongqing Institute of Measurement and Quality Inspection
Hebei Provincial Product Quality Supervision and Inspection Institute
N.S. Hazardous Chemical Quality Supervision and Inspection Center Jiangsu Province Product Quality Supervision and Inspection Research Institute
Chemical Industry Latex Product Quality Supervision and Inspection Center
Beijing Building Materials Quality Supervision and Inspection Station
Chemical Industry Synthetic Materials Aging Quality Supervision and Inspection Center
Nanjing Product Quality Supervision and Inspection Institute
National Building Decoration Materials Quality Supervision and Inspection Center
Sein Shanghai Quality Supervision and Inspection Technology Research Institute
Fujian Provincial Product Quality Inspection Research Institute
Anhui Product Quality Supervision and Inspection Research Institute
Tianjin Product Quality Supervision and Inspection Technology Research Institute
National Paint Quality Supervision and Inspection Center
Zhejiang Provincial Institute of Quality Inspection and Research
Guangdong Product Quality Supervision and Inspection Research Institute
Petroleum and Chemical Industry Rubber and Chemical Quality Supervision and Inspection Center (Beijing)