introductory

Since the implementation of the value-added tax policy, in order to strengthen the comprehensive utilization of resources and protect the environment, China has given preferential tax policy support to enterprises engaged in the recycling and operation of waste materials, and has successively implemented preferential policies such as tax exemption, immediate refund, first levy and then return, and simple levy. Changes in policy have led to changes in the business model of enterprises. In the past, under the tax exemption policy, the industry did not need to bear the VAT, the design and construction of the transaction mode need not consider the tax factor, steel mills and other waste enterprises usually directly grasp the first-hand source of goods, from the local operation of the recycling of waste materials from the retailer to purchase. In the context of taxation, the sale of goods need to pay 13% value-added tax, but due to the general low willingness of the retailer to pay taxes on their own, not willing to declare taxes and issue invoices, resulting in the procurement of goods with the waste enterprises at the same time can not obtain legal and effective input credit and pre-tax deduction vouchers, which bear the overall sales of 13% of the tax burden, the emergence of a fundamental obstacle to the purchase of enterprises with the waste of the tax link, the first-hand The sourcing model fails to satisfy the demand of enterprises using waste to obtain input invoices.

In this regard, there are two ways for steel mills and other waste-using enterprises to cope with the situation. One is off-the-books operation, i.e., no bookkeeping and no invoicing. Although it realizes the same effect as the tax exemption policy, it is a non-compliant way to cope with the situation and cannot be included in the tax supervision system. The other is on-the-books operation, the waste-using enterprise solves the invoice problem by setting up recycling enterprises at the front end, realizes the compliance operation under the premise of bearing the tax burden of 13% of the value-added amount of the segment by itself, and at the same time transfers the problem of non-invoicing of the retailer to the recycling enterprise, and the "retailer-recycling enterprise-waste-using enterprise The "retailer-recycling enterprise-waste-using enterprise" tripartite transaction model came into being in this context. The State Administration of Taxation (SAT) made the Approval Response on Relevant Taxation Issues Concerning the Business of Recycling of Scrap Materials on October 10, 2002 (Guo Shui Han [2002] No. 893), which clarified the authenticity of the transactions under this business model. According to the viewpoint of the tax bureau, the invoices issued by the recycling enterprises to the waste-using enterprises did not constitute false invoicing and the transactions were authentic and compliant. The State Taxation Letter [2002] No. 893 affirms the business model of "retailer-recycling enterprise-waste-using enterprise", which has played a crucial role in promoting the development of the domestic renewable resources industry. However, compared with the tax exemption policy in the past, under the three-party transaction mode, the waste-using enterprises bear an additional tax cost of 13% of the value-added amount of the link, and because the industry itself has a low profit margin, the increase in the tax burden is still a major impact on the development of the industry, and therefore the waste-using enterprises have always had a request to reduce the cost of the tax burden.

Utilization of Ticket Points in the Recycling Industry

Ticket point is the waste materials field industry within the industry's common name, internal jargon, that is, the point fee, invoicing fees, buy tickets fee, sell tickets fee and so on. Assuming that the steel mill from the recycling enterprise to purchase a batch of goods, in the case of off-the-books operations, due to avoidance of the tax department supervision without paying taxes, the two sides of the transaction price only contains the goods itself tax-free market price, cheaper; if the account for the operation, recycling enterprises issued VAT invoices need to pay 13% tax, so the two sides of the transaction price contains the goods itself tax-free market price, as well as the recycling company tax payment Costs. According to the principle of general VAT taxation, VAT tax can be passed on, after the recycling enterprise issued the invoice, the VAT tax can be passed on to the steel mill in full, that is, the steel mill in addition to the recycling enterprise paid the ex-tax market price of the goods, but also need to pay 13% VAT.

Throughout the field of waste materials supply more buy less market situation, steel mills and recycling enterprises between the business relationship is special, steel mills occupy a dominant position in the market, with pricing rights, recycling enterprises almost no bargaining space. Steel mills in order to save costs are not willing to pay the full cost of 13% tax burden, so with the recycling business agreed to bear a certain tax burden, at this time the steel mills to the recycling business to pay the actual cost of tax and the proportion of the market price of the goods excluding tax, is the renewable resources industry, the "ticket point" said.

Normally speaking, recycling enterprises charge less than 13% of the ticket point, but bear 13% of the value-added tax, in the tax level will obviously be a loss, the need to use their own part of the profits to make up for this loss. However, from a practical point of view, waste materials recycling enterprises are usually set up in areas with financial rebates, through financial incentives to make up part of the cost of support operations. On the recycling enterprise's profit calculation, need to consider a number of factors, the calculation formula is: profit = goods excluding tax market price + ticket point + financial incentives - payable VAT - buy cost - other operating costs. Recycling enterprises in cooperation with steel mills before the formula in addition to the ticket point outside the factors can basically be determined or predicted, as long as the recycling enterprise anchors the profit, you can carry out costing, to determine a minimum ticket point, the business department to negotiate the cooperation is higher than the minimum ticket point, the enterprise will have a profit. That is, as long as the steel mills to pay the ticket point costs more than the minimum ticket point, the enterprise can make a profit.

What is the nature of a ticket point?

Value-added tax (VAT) is an out-of-the-money tax, and from the point of view of the principle of taxation, the non-taxed market price of goods and the amount of VAT can be clearly demarcated. The non-taxed market price of a commodity is the price determined according to the cost of production of the commodity, market factors, supply and demand, etc., and depends only on market factors, while the VAT amount is additionally levied at a fixed rate according to the provisions of the tax law. The additional levy means that the full amount of VAT tax can be passed on to the consumer without affecting the seller's profit. In other words, the design of VAT system applies the mode of separation of taxpayer and tax-negative person by default, according to the tax law, the taxpayer pays the tax to the tax authority, the main body that generates the behavior of scrap sales is the legal taxpayer, the recycling enterprise sells the scrap steel, which belongs to the legal taxpayer, the taxpayer can not be agreed by the parties themselves, but the one that actually bears the tax belongs to the tax-negative person, and the tax-negative person can be carried out by the two sides of the transaction. The tax payer can be agreed between the two parties, and usually the steel mills bear the full amount of VAT.

For example, the recycling enterprise will sell the goods to the steel mill, the price of goods priced at 100 yuan, issued 13% VAT invoices need to pay tax 13 yuan, and the steel mill settlement price that is the total price and tax 100 + 13 = 113 yuan. For the steel mill, it needs to pay the recycling enterprise 113 yuan, specifically including the payment of 100 yuan, tax 13 yuan. This is the general tax burden transfer mode, in this mode, the steel mill through the payment of 13% of the ticket point, obtained 13% of the input tax amount, actually bear the tax burden of 13%.

In a buyer's market, steel mills have the right to price and bargaining power, can be sought from recycling enterprises in accordance with the low invoice point to obtain the same amount of input tax, this low invoice point does not mean that the recycling enterprises to pay the total amount of tax reduction, on the contrary, recycling enterprises are still required to pay the VAT in accordance with the law at a rate of 13%, but only a part of which is passed on to the steel mills, and part of the recycling enterprises, in essence, the system of the negative tax person to make In essence, the agreement is made to the tax-negative person.

Because the steel mill has pricing power in the trading relationship, it can propose a new settlement program to the recycling enterprise. In the trading relationship between the two sides, when the payment for the goods is $100, the steel mill as a tax-negative person needs to pay a tax of $13, it is not willing to actually bear the entire tax burden, so the $13 tax is divided into two parts, one part is borne by the supplier, and one part is borne by the steel mill itself. That is, the recycling enterprise still issues a 13% invoice, but the steel mill only pays $9 of the tax, and the remaining $4 is shifted to the recycling enterprise's side to bear. In the end, the settlement price between the steel mill and the recycling enterprise is 100+9=109 RMB. As the tax payment to the tax authorities is still 13 yuan, the recycling enterprise needs to make up the difference of 4 yuan, and the payment becomes 100-4=96 yuan. In this example, the steel mill pays 9 yuan to obtain 100 yuan of invoices excluding tax, and the coupon point is 9/100=9%. The steel mill is actually burdened with 9% VAT, and the statutory taxpayer, the recycling company, is burdened with an additional 4% VAT.

Is the setup of the ticket booth illegal or not?

As mentioned earlier, the coupon point is essentially a shift in the subject of tax liability. A question that needs to be clarified is whether the ticket point must be set at 13%? Or can the ticket point be set at 8%, 9% or 10% according to the market situation, and is this illegal? In the author's view, this is not illegal. VAT pass-through is not mandatory by law, but is a transaction mode generally followed in the market. In fact, VAT pass-through itself means the separation of taxpayers and tax-negative persons, and the complete separation of VAT taxpayers and tax-negative persons is still recognized by the law, and the taxpayers should bear part of the tax, and it should not be prohibited by the law. In practice, there are also more cases of self-agreement on the tax-negative subject. For example, the judicial auction, the seller to pay the tax, can be agreed by the buyer. Another example, labor relations, the workers have to pay the tax, can be agreed by the company. In these cases, there is a free agreement on the tax liable person, see the actual burden of tax subject from one party to another is not illegal.

The relevant legal norms on tax collection and administration clearly stipulate the taxpayers for each type of tax, but they do not prohibit the taxpayer from agreeing with the contractual counterparty that the tax is to be paid by the contractual counterparty or by a third person. The provisions of the tax law on the types, rates and amounts of taxes are mandatory, while there are no mandatory or prohibitive provisions on who actually pays the taxes. The agreement between the parties to the contract on the terms of the burden of taxes and fees does not jeopardize the tax interests of the state, nor does it change the mandatory provisions of the tax laws and administrative regulations on the types of taxes, tax rates and amounts of taxes, and will not affect the state tax. The agreement on tax burden belongs to the field of private law, is the arrangement of the rights and obligations of the parties to the contract, belongs to the scope of the party's autonomy of meaning, under the premise of having a reasonable commercial purpose, the tax burden clause shall be valid. Therefore, the setting of the ticket point is in line with the legal values of civil law of autonomy of meaning and freedom of contract, and also reflects the commercial value of facilitating transactions in a specific situation, and does not violate the mandatory provisions of the law, and should be recognized.

Revisiting the value of fiscal return policies

Finally, we will focus our perspective on the profitability of waste materials recycling enterprises. Recycling enterprise's profit point is not in the price difference of goods, because recycling enterprises in the market does not have pricing power, it is difficult to earn the price difference of goods, but also to bear part of the transfer of the tax burden, financial incentives in the profit is particularly important. Recycling enterprises from the use of waste enterprises to obtain less than 13% of the ticket point, but to the use of waste enterprises issued invoices tax rate is 13%, need to bear the difference in the tax burden of the cost, and at the same time, due to the enjoyment of the fiscal subsidy policy, you can realize the profitability of the previously mentioned, the ticket point to set up a transaction mode is not illegal in nature, the recycling enterprises will be questioned is the fiscal subsidy policy is legal and valuable. If the financial incentives themselves are considered legitimate and reasonable, the waste material recycling model is justified at the tax level; conversely, the recycling model itself may be suspected of violating the tax law and should be outlawed.

In the author's view, the government applies the fiscal subsidy policy to recycling enterprises in pursuit of the corresponding social public interest. Or there is a view that the government of a particular enterprise financial incentive amount is huge, which is nearly the same as the local hundreds of thousands of people's annual financial expenditure on education, the value of financial incentives applied to the enterprise is not recognized. The problem is that the survival and development of waste materials recycling enterprises, and financial incentives can not be separated. Therefore, the financial incentives for the application of the object of horizontal comparison is not objective, which is detached from the source of the financial incentives themselves, the recycling enterprises to apply the financial incentives relying on a large number of renewable resources enterprises to accumulate invoices, only to reach a certain amount of money to meet the corresponding incentives for the application of the conditions, and therefore flatten the horizontal comparison can not be derived from an objective and accurate answer.

In the author's view, the financial incentives for waste material recycling enterprises in the renewable resources industry are valuable, mainly in the following aspects:

For one thing, there is no loss of tax revenue for the state when the central government and the local government share the VAT proportionally. For example, a recycling enterprise that carries out a real transaction with a downstream steel mill is required to pay 100 million yuan of VAT tax, and the fiscal subsidy also comes from this. Overall, the recycling enterprise pays 100 million yuan of tax, and the downstream steel mills deduct 100 million yuan, so there is no loss of national tax revenue. According to the "50-50 sharing" ratio of VAT, i.e., the central government shares 50% of the VAT, and local governments share 50% of the VAT according to the place of tax payment, for the 100 million yuan paid by recycling enterprises, 50 million will be paid to the state treasury, and 50 million will be returned to local governments. Local governments have autonomy and should guarantee the fulfillment of local financial affairs in accordance with the law to meet local basic public service needs, so the localities will then award subsidies to the recycling enterprises according to the corresponding proportion. If the authenticity of the business is denied, and the financial incentives received by the enterprises are denied, what is the point of talking about 100 million yuan of value-added tax (VAT), and there is no reasonableness or legitimacy in sharing 50 million yuan of tax with the State, and the tax that has already been paid in should be refunded.

Secondly, the economic data of steel scrap in the chain of renewable resources business can be reflected. In the case of private-to-private transactions, the state is unable to count the real transaction data, and the hidden economic data can't show the volume of the scrap steel business and the scale of operation. The application of financial incentives is an important part of the sustainable development of recycling enterprises. By adjusting the data that are not counted to a countable state, it can effectively reflect the relevant economic data and the industry, and the GDP can thus be shown. In addition, the recycling enterprise through the adjustment of business model and purchase and sale transaction subject, grafting retail households and waste enterprises, the hidden personal tax source adjusted to the explicit enterprise tax source, waste materials recycling chain back to the tax regulation, the business model will be the surrounding areas of the tax source of the supply of waste people gathered in the place, and the same for the protection of the retail household tax source not to be lost and to increase the national tax revenues to make a corresponding contribution.

Third, to create a scrap steel industry base, shaping the brand effect. Scrap material recycling enterprises in the business process, the financial incentives and subsidies formed by the profits into the construction of scrap steel processing base, to promote the production and marketing of one-stop business development, the realization of the corporate brand effect, for the local and corporate gain solid value, not only to achieve the local renewable resources recycling industry, the quantity of the quantum leap, but also for the further development of renewable resources recycling economic breakthrough in quality has laid a good foundation. Establish and improve the recycling system of renewable resources such as steel scrap, to improve the comprehensive recycling rate, promote the steel, non-ferrous and other traditional industries green transformation, to achieve the "carbon peak" "carbon neutral" this national strategic goal is also of great significance, the state should actively support the development of the industry. Promote the development of the industry.