As most production-oriented enterprises do not have the conditions for waste disposal in accordance with the standard, they have been using the "entrusted disposal" method to deal with the lack of mandatory provisions of the law in the era of "sewage charges", but since the official implementation of the Environmental Protection Tax Law in 2018, the tax authorities have issued a number of large environmental tax fines against such production-oriented enterprises. However, since the official implementation of the Environmental Protection Tax Law in 2018, the tax authorities have issued a number of large environmental tax fines for such production-oriented enterprises, triggering heated debates, but also attracting the attention of enterprises to environmental tax compliance. On the one hand, due to the environmental protection tax is mostly the leveling of sewage charges, its levy object, scope, tax standard, tax basis and did not make large adjustments, enterprises in the fee to tax will not obviously feel the increase in the tax burden, and therefore did not pay attention to. But on the other hand, due to the "fee to tax" after the enterprise should bear the legal responsibility is also a trend of aggravation, before the sewage charging system is not enough rigidity of the enterprise will face a huge risk of violation of the law. Starting from two practical cases, the author systematically analyzes the compliance of "entrusted disposal" of wastes by analyzing the focus of disputes between tax enterprises and the two sides for the benefit of readers.

I. Case Analysis

Case 1: The enterprise entrusted the construction enterprise to "dispose" solid waste, and the tax bureau audit demanded to make up more than 50 million dollars.

Company A is a heating enterprise, which produces a large amount of slag and fly ash in the course of its operation, and the tax authorities found through the tax control system that the number of tax declarations of Company A's solid wastes from 2018 to 2021 was zero, and then launched an audit on the enterprise. The tax authorities found that there were three trading enterprises downstream of Company A, all of which were suppliers to the building construction enterprises, and the trading enterprises signed purchase and sales contracts with Company A and regularly transported slag and fly ash to the premises of the building construction enterprises on a weekly basis and issued settlement statements.In September 2021, a municipal tax inspection bureau issued a Notice of Tax Matters determining that Company A had not declared environmental protection tax from January to September 2021, and required the enterprise to to pay back the tax within a specified period of time, and the enterprise paid the tax within the specified period of time. in november 2021, the inspection bureau again issued a Notice on Tax Matters, which determined that company a had not declared environmental protection tax in accordance with the regulations for the period from 2018 to 2020, and approved it as an emission amount on the basis of the enterprise's output volume, and demanded the enterprise to pay back the tax and the late payment fee, totaling more than 50 million yuan. Company A therefore objected, arguing that its solid waste sales behavior belonged to "entrusted disposal" and did not need to pay environmental protection tax according to relevant laws.

Case 2: The commissioned disposal enterprise did not meet the standard, and the tax bureau did not recognize the "sale" of solid waste as "commissioned disposal".

Company B mainly produces carbon products, its coal-fired sulfur dioxide, nitrogen oxides and other air pollutants, in accordance with the professional monitoring organization issued by the relevant provisions of the state and the monitoring specifications of the monitoring data to calculate the payment of environmental taxes. However, the taxable solid wastes such as furnace (coal) slag produced by it every month have been zero declaration. The investigators of the tax authority understand through the scene that Company B produces about 150 tons of coal slag per month, and Company B has signed a coal slag disposal agreement with C Brick Factory, i.e., the coal slag produced by Company B is sold to C Brick Factory at a price of RMB 15 per ton, which is responsible for the daily removal and used for the production of ordinary red bricks by C Brick Factory. When the investigator asked Company B to declare and pay environmental protection tax for the cinder produced every month also according to the calculation of solid waste emission, the person in charge of Company B thought that the cinder produced by the enterprise every month was disposed of in time, which did not belong to the discharge of pollutants directly to the environment, and was in line with the provisions of Article 4 of Environmental Protection Tax Law, and should not be subjected to the environmental protection tax, so he did not accept the tax authority's request.

At the same time, Company B believes that according to the provisions of Article 5 of the Regulations for the Implementation of the Environmental Protection Tax Law, "the basis for taxing taxable solid wastes shall be determined in accordance with the amount of solid wastes emitted. Solid waste emissions for the current taxable solid waste generation minus the current taxable solid waste storage, disposal, comprehensive utilization of the amount of the balance", the enterprise monthly cinder produced by the C Brick Factory timely recycling and disposal and comprehensive utilization of cinder bricks produced, the enterprise should be zero declaration, no need to pay environmental protection tax. The tax authorities believe that although Company B has carried out timely transportation and disposal of monthly cinder blocks by C Brick Factory, the disposal is not in line with the provisions of Article 4(2) of the Environmental Protection Tax Law, which stipulates that "solid wastes shall be stored or disposed of in the facilities and places in line with the national and local environmental protection standards", and therefore the enterprise should make tax declaration according to the actual emissions. Therefore, the enterprise should make tax declaration according to the actual emissions.

II. The core controversy of the case

(I) Can the sale of solid waste be recognized as "disposal"?

According to the provisions of Article 4 of the Environmental Protection Tax Law: "One of the following circumstances is not a direct discharge of pollutants into the environment, and will not pay the environmental protection tax for the corresponding pollutants: (1) enterprises, institutions and other production operators discharge taxable pollutants into the centralized treatment of sewage and centralized treatment of domestic garbage set up according to law; (2) enterprises, institutions and other production operators store or dispose of solid wastes in facilities and premises that meet national and local environmental protection standards. production operators that store or dispose of solid wastes in facilities or places that comply with national and local environmental protection standards." In the above two cases, Company A believes that its actual sales of solid waste to construction enterprises, and Company B believes that its sales of slag and other solid waste to C Brick Factory is the disposal and storage of solid waste in the place that meets the environmental protection standards, which is not a direct discharge of pollutants into the environment, and therefore does not need to pay environmental protection tax, and the enterprises are "exempted" from paying environmental protection tax in the amount of solid waste generated. The enterprise's "exemption" treatment of solid waste generation is in accordance with the law. However, the tax authorities believe that the sale of solid waste is not "disposal" of solid waste, and the downstream enterprises of Company A and B do not meet the national and local environmental protection standards, so the enterprise should pay the corresponding tax.

(II) Can the amount of solid waste generated be directly used to authorize the enterprise's emissions?

In Case 1 above, the tax authorities, in accordance with Article 10(4) of the Environmental Protection Tax Law, stipulated that "If it cannot be calculated in accordance with the methods stipulated in the first to third subparagraphs of this Article, it shall be approved and calculated in accordance with the methods of sampling and measurement stipulated by the competent department of ecological environment of the people's government of the province, autonomous region, or municipality directly under the central government." The emissions of solid waste of Company A are approved, but Company A believes that, according to Article 21 of the Environmental Protection Tax Law, "Where the emissions of pollutants are approved and calculated in accordance with the provisions of Item 4 of Article 10 of this Law, the tax authorities, in conjunction with the competent departments of ecological and environmental affairs, shall approve the types and quantities of pollutants discharged and the amount of tax payable." When the tax authority approves the emissions, it should approve the emissions together with the competent ecological and environmental authorities, and should not directly determine the amount of emissions based only on the research of the local ecological and environmental bureaus, nor should the tax authority approve the emissions on its own.

(III) how to recognize solid waste emissions?

In practice, some enterprises dispose of solid waste through sales, and do not record the actual amount of generation and emissions, but only have the bill issued by the downstream enterprises, which generally cannot be recognized by the tax authorities. In Case 1 above, the tax authority relied on the data on solid waste generation of the enterprise obtained by the Ecology and Environment Bureau after research to determine the solid waste emissions of the enterprise and calculated the tax payable by the enterprise according to the provisions of Article 11 of the Environmental Protection Tax Law, i.e., "The taxable amount of the environmental protection tax shall be calculated in accordance with the following methods: ... ...(c) the taxable amount of taxable solid waste shall be the amount of solid waste emissions multiplied by the specific applicable tax amount;" the enterprise believes that, according to the provisions of Article 6 of the Regulations for the Implementation of the Environmental Protection Tax Law, "If a taxpayer has any of the following circumstances, the amount of taxable solid waste generated in the current period of the taxpayer shall be taken as the amount of solid waste emissions: (i) illegal dumping of taxable solid wastes; (ii) making false tax declarations." Only in the case of illegal dumping and false tax declaration can the amount of emissions be determined by the amount generated, but it did not commit the above two acts, so the behavior of the tax authorities did not comply with the law.

III. Analysis of points of contention

(I) Solid waste sale should be recognized as "entrusted disposal".

In practice, waste production enterprises often for the price of waste disposal tools and waste disposal cost considerations, choose to sell solid waste to downstream enterprises for commissioned disposal, such as the construction company in this case. However, the tax authorities usually do not recognize the waste "sale" as "entrusted disposal" behavior.

In the author's opinion, according to the definition of solid waste disposal in the bylaws of the Law on Prevention and Control of Environmental Pollution from Solid Waste, "refers to the incineration of solid waste and the use of other methods to change the physical, chemical and biological characteristics of solid waste, in order to achieve the reduction of the amount of solid waste generated, reduce the volume of solid waste, reduce or eliminate the hazardous components of its activities, or the final disposal of solid waste in a landfill that meets the requirements of environmental protection regulations. activity of placing it in a landfill that meets the requirements of environmental protection regulations." Therefore, the sale of solid waste to the construction enterprises belongs to "the use of other methods to change the physical, chemical or biological characteristics of solid waste to reduce the amount of solid waste generated", and it should be recognized that the sale of solid waste belongs to "entrusted disposal". ". From the case two can also be seen, the tax authorities recognized the solid waste made into red bricks belongs to the physical sense of the act of "disposal" behavior, only the enterprise should also meet the requirements of disposal in accordance with the provisions of the premises and facilities and the corresponding procedural requirements, in order to constitute the environmental protection law in the sense of "disposal ".

In addition, if some enterprises do not calculate the actual amount of solid waste disposed of, or only rely on the amount of solid waste sold as the amount disposed of, the tax authorities may rely on the provisions of Article 3 of the Notice on Relevant Issues Concerning the Environmental Protection Tax (Cai Shui [2018] No. 3), which states: "Taxpayers shall accurately measure the amount of taxable solid wastes stored, disposed of, and comprehensively utilized, and if they do not accurately measure them, they shall not be taxed from their own sources". , which are not accurately measured shall not be subtracted from their taxable solid waste generation." It is found that solid waste disposed of by enterprises shall not be subtracted from the amount generated. In the author's opinion, the enterprise will hand over all the production solid waste to the downstream enterprise for disposal, while the downstream enterprise settles the bill based on the purchased quantity, the enterprise has reason to believe that the solid waste it sold has been disposed of, and it is not improper to determine the disposed quantity of solid waste based on the settlement bill of the downstream enterprise. Meanwhile, according to Article 3 of the Circular on Relevant Issues of Environmental Protection Tax, the tax information that can prove the flow and quantity of solid waste includes the solid waste transfer bill. Therefore, the tax authorities should rely on the settlement statement of the downstream enterprise to determine the actual quantity disposed of by the enterprise.

(II) Solid waste emissions should not be recognized by the amount of generation

To determine the amount of solid waste emissions, will lead to a sharp rise in the tax burden of enterprises, and has a certain punitive, so the "Regulations on the Implementation of the Environmental Protection Tax Law" Article 6 of the solid waste can be generated as emissions of the circumstances of the strict provisions, and no exceptions or underpinning provisions, so the tax authorities should be only "illegal dumping" and "false tax declaration" two kinds of behavior to penalize the determination. Therefore, the tax authorities should only penalize the two behaviors of "illegal dumping" and "false tax declaration". In Case 1, Company A sells solid waste to dealers and further sells it to construction enterprises, which does not belong to "illegal dumping"; according to Article 2 of the Interpretation of the Supreme People's Court on Several Issues Concerning the Specific Application of the Law in the Trial of Criminal Cases of Tax Evasion and Tax Resistance:" False tax declaration' means that the taxpayer or withholding agent submits false tax return, financial statement, withholding and collection report form or other tax declaration information to the tax authorities, such as providing false application, fabricating false information on tax reduction, tax exemption, tax credit, tax return after collection, and so on. ", the enterprise's failure to declare solid waste is not a false tax declaration. Therefore, the tax authority's approval of the enterprise's solid waste emissions by the amount of solid waste generated is somewhat flawed.

According to Article 10, Item 4 of the Regulations for the Implementation of the Environmental Protection Tax Law, "(4) If it cannot be calculated in accordance with the methods prescribed in Items 1 to 3 of this Article, it shall be approved and calculated in accordance with the methods of sampling and measurement prescribed by the competent department of ecological environment of the people's government of the province, autonomous region, or municipality directly under the central government." The tax authorities shall approve the calculation in accordance with the sampling and measurement methods prescribed by the competent ecological and environmental authorities, and cannot determine the amount of emissions based only on the amount generated. Meanwhile, according to Article 47(1) of the Implementing Rules of the Tax Collection and Management Law, the tax authorities shall use the following methods to approve the taxable amount: "(1) Approve the tax burden level with reference to local taxpayers in the same type of industry or in similar industries with similar scale of operation and level of income; (2) Approve the tax burden level in accordance with the method of business income or cost plus reasonable expenses and profit; (iii) Approved in accordance with the projection or measurement of consumed raw materials, fuel and power; (iv) Approved in accordance with other reasonable methods." The tax authorities should first adopt the above methods for approval, and it is not appropriate to approve directly based on the amount generated.

(III) The amount of enterprise emissions should be jointly approved by the tax authority and the ecological and environmental authorities

According to Article 35 of the Tax Collection and Management Law: "Where a taxpayer has one of the following circumstances, the tax authorities shall have the right to authorize the amount of tax payable by the taxpayer: (1) not to set up books of account in accordance with the provisions of the laws and administrative regulations; (2) to set up books of account in accordance with the provisions of the laws and administrative regulations, but not set up; (3) unauthorized destruction of the books of account or refusal to provide information on tax payment (d) Although the books of account are set up, the accounts are chaotic or the cost information, income vouchers and expense vouchers are incomplete, making it difficult to check the accounts; (e) The tax obligation occurs and the tax declaration is not made in accordance with the prescribed period, and the tax authorities order the declaration of the deadline, and the declaration of the tax is still not made after the expiration of the deadline; (f) The tax basis declared by the taxpayer is obviously low, and there is no justifiable reason for it." In Case 1, Company A did not violate the provisions of (a) to (d) concerning the books of accounts, and at the same time, there was no situation that the tax basis was obviously low without justifiable reasons, therefore, the tax authorities requested Company A to be approved, and it should be approved by the corresponding procedures that Company A should be required to make a tax declaration within the specified period after Company A failed to declare on schedule, therefore, the tax authorities directly approved Company A's environmental protection tax without notification. Therefore, the tax authorities directly approved the environmental protection tax of Company A without notification and the behavior of the tax authorities was not in accordance with the provisions of the law. As a guarantee for a country's tax collection, the right to authorize collection should not be abused, and the Supreme People's Court issued the "Ten Typical Cases of Administrative Trial (the first batch)" in 2017, "Guangzhou Delfa Real Estate Construction Co. v. The First Inspection Bureau of the Local Taxation Bureau of Guangzhou Municipality Tax Disposal Decision Case", which shows that the tax authorities should exercise the tax collection The case shows that the tax authorities should be prudent in exercising the power of tax collection and authorization, so as to achieve equality in the importance of "safeguarding the tax revenue of the state" and "protecting the legitimate rights and interests of the taxpayers".

In addition, according to Article 35(7) of the Tax Collection and Administration Law, "the specific procedures and methods for tax authorities to approve the amount of tax payable shall be stipulated by the competent tax authorities under the State Council". The approval of environmental protection tax by the tax authorities should be in accordance with the corresponding provisions, i.e., the tax authorities should approve the taxable amount together with the competent ecological environment department in accordance with the provisions of Article 21 of the Environmental Protection Tax Law. The provisions of this article not only from the procedure of the tax authorities to approve the enterprise environmental protection tax to make restrictions, but also for the protection of the rights of the enterprise entity, the enterprise operation and production of waste on the environment by the ecological and environmental authorities to confirm the principle of "substantive taxation" embodied.

IV. Environmental tax compliance for "commissioned disposal" of solid waste

(I) Disposal should be entrusted to enterprises that meet the standards.

In Case 2 above, as the downstream enterprise disposing of solid waste did not comply with the requirement of "storing or disposing of solid waste in facilities or places that comply with national and local environmental protection standards", the tax authorities determined that the coal slag disposed of by Company A did not comply with national and local environmental protection standards, and according to Article 5 of the Environmental Protection Tax Law: "Enterprises, institutions and other production operators that store or dispose of solid wastes that do not meet the standards of national and local environmental protection shall pay environmental protection tax." Enterprises are required to pay back the environmental protection tax. Therefore, when choosing a downstream enterprise to entrust the disposal of waste, the producer should review the downstream enterprise to confirm that its equipment and premises comply with the national standards, so as to avoid the non-compliance of the "disposal" behavior caused by the tax authorities to audit. At the national standard level, waste-producing enterprises should select disposal enterprises that comply with the corresponding standards in accordance with the provisions of the Announcement on the Publication of the Pollution Control Standards for General Industrial Solid Waste Storage and Landfill Pollution Control Standards and Three Other Solid Waste Pollution Control Standards (GB 18599-2020); and from the perspective of the local standards, waste-producing enterprises should actively communicate with local ecological environmental and tax authorities to select disposal enterprises according to the local solid waste environmental protection standards. solid waste environmental protection standards to select entrusted disposal enterprises.

In addition, according to Article 37 of the Law on the Prevention and Control of Environmental Pollution by Solid Wastes amended in 2020, "A unit that generates industrial solid wastes and entrusts others to transport, utilize or dispose of industrial solid wastes shall verify the subjective qualifications and technical capabilities of the entrusted party, sign a written contract according to the law, and agree on the requirements for the prevention and control of pollution in the contract. ...... unit that generates industrial solid waste violates the provisions of the first paragraph of this article, in addition to being penalized in accordance with the provisions of relevant laws and regulations, it shall also be jointly and severally liable with the entrusted party for causing environmental pollution and ecological damage." Waste-producing units to verify the main qualifications and technical capabilities of the entrusted party in the previous "Solid Waste Law" did not provide, so the waste-producing enterprises in the "entrusted disposal" process should pay special attention to the entrusted party to verify the relevant qualifications, and in the contract agreed to the requirements of pollution prevention and control, or else for the generation of environmental pollution will not only bear the administrative responsibility of the tax law, but also the responsibility for the environmental pollution and ecological damage. Otherwise, they will not only bear the administrative responsibility in the tax law, but also bear the civil, administrative and even criminal responsibility due to the environmental pollution.

(II) "Entrusted Disposal" to be declared in accordance with the law

In the Ministry of Finance, the State Administration of Taxation, the Ministry of Ecology and Environment of the three departments jointly issued the "Notice on Relevant Issues on Environmental Protection Tax", Article 3, paragraph 1 provides that: "taxpayers will be taxable solid wastes transferred to other units and individuals for storage, disposal or comprehensive utilization in accordance with the law, the amount of solid waste transferred to the corresponding amount of taxable solid waste storage, disposal or comprehensive utilization; taxpayers receive the amount of taxable solid waste transfer does not count as the amount of taxable solid waste generated during the period. quantity or comprehensive utilization; the taxable solid waste transferred quantity received by the taxpayer shall not be counted as its current taxable solid waste generation quantity." Where solid waste is disposed of and transferred, the measurement of solid waste is not transferred with it and is still counted in the current taxable solid waste generation of the commissioning party, and the commissioning party's enterprise shall declare it in accordance with the law.

In addition, the second paragraph of Article 3 in the Notice on Relevant Issues of Environmental Protection Tax stipulates that when taxpayers entrusted with disposal declare tax, they shall report to the tax authorities the amount of taxable solid waste generated, stored, disposed and comprehensively utilized, and at the same time, they shall report tax payment information that proves the flow and amount of solid waste, and the entrusted enterprises shall pay attention to the declaration procedure of environmental protection tax and pay attention to the retention of the relevant materials, so as to avoid causing the The commissioned enterprises should pay attention to the environmental protection tax declaration procedure and retain relevant materials to avoid causing audit by the tax authorities.

(III) Improvement of environmental protection tax compliance system

As mentioned above, before "fee to tax", some enterprises do not have a high awareness of fee payment and are not familiar with the process of sewage declaration, and often achieve the purpose of "paying less fee" through various methods, and there is even the phenomenon of negotiation of fee payment. However, after the "fee to tax", clear enterprise tax obligations, enterprises need to bear the legal responsibility is also a trend of aggravation, before the enterprise underpayment of sewage charges, the consequences of the more inclined to pay back taxes or bear administrative penalties, but at present the enterprise may not only face a high amount of taxes to pay back the problem, but also will face the risk of being recognized as tax evasion and will be investigated for the corresponding administrative or criminal responsibility. administrative or criminal responsibility. Especially in recent years, topics such as carbon neutrality have been raised by the relevant departments many times, and environmental tax compliance has become one of the key points of audit by the tax authorities. Therefore, it is necessary for enterprises to set up an environmental protection and tax-related compliance system and raise the awareness of risk prevention.