Editor's Note: The farmland occupation tax is a tax levied on units and individuals that occupy farmland to build buildings and structures or engage in non-agricultural construction. As a "small tax", in practice, many enterprises ignore the tax obligation of farmland occupation tax, or fail to accurately define the tax basis and the time when the tax obligation occurs, which leads to the risk of tax payment, late payment and even qualitative tax evasion. Based on the current supervision situation of farmland occupation tax, this paper analyzes the common tax-related risks of farmland occupation tax, and suggests the matters that should be focused on farmland occupation tax for readers' reference.

I. The situation of farmland occupation tax supervision: digital upgrading of tax collection and management, multi-sectoral information connectivity

Since the official promulgation and implementation of the Farmland Occupation Tax Law in 2019, departments of taxation, natural resources and planning, ecological environment, water conservancy, agriculture and rural areas have established cooperation and information exchange mechanisms to strengthen the collection and management of farmland occupation tax. For example, the Notice of Hunan Province on Doing a Good Job in Cooperation and Information Exchange of Farmland Occupation Tax Departments (Xiang Caishui [2020] No.17) stipulates that every quarter, The provincial departments of natural resources, agriculture, rural areas, water conservancy, ecological environment and forestry provide information on the conversion of agricultural land to the provincial tax bureau, and the relevant departments of natural resources at the city and county levels should inform the tax authorities at the same level in writing within 10 days after discovering the situation of unauthorized occupation of agricultural land, land use change, pollution and mining subsidence. In recent years, with the digital upgrade and intelligent transformation of tax collection and management, the tax authorities' ability to collect and manage farmland occupation tax has been further enhanced. At the same time, some local procuratorial organs have also played the role of public interest litigation, urging local tax authorities to collect farmland occupation tax in time:

Since the beginning of this year, Haikou Municipal Taxation Bureau has strengthened the management of farmland occupation tax collection through a number of measures, such as further deepening the inter-departmental cooperation mechanism with the municipal natural resources and planning department, cross-checking the situation of new construction land from 2022 to 2025, establishing a project management ledger, accurately locating taxable plots, and coordinating the municipal capital planning department to issue 29 notices to taxpayers for handling farmland occupation procedures; With the help of big data and manual review of "double insurance", we will carefully screen the key information declared by taxpayers, such as cultivated land occupation area, land type identification, tax rate application, tax reduction and exemption. In the first quarter of this year, under the whole chain audit system of "intelligent screening+manual fine nucleus", Haikou Municipal Taxation Bureau has checked more than 150 declaration data, corrected seven problems of underreporting, underreporting and misstatement, and made up 856,100 yuan of tax, and the declaration accuracy rate has increased to over 95%.

In recent years, many procuratorial organs have played the role of public interest litigation, urged relevant functional departments to perform their duties, and ensured that farmland occupation tax should be collected. For example, at the end of 2024, the public interest litigation case handling department of Pingshan District Procuratorate in Shenzhen found that some subjects who illegally occupied cultivated land did not pay the cultivated land occupation tax according to law. In order to further investigate and verify the above situation, the Pingshan District Procuratorate has collected the information ledger and the farmland occupation tax warehousing ledger of the illegally occupied farmland in the jurisdiction since 2019 from the relevant functional departments of the district, and conducted data collision comparison through the big data legal supervision model platform of the national procuratorate, and screened out some clues that the farmland occupation tax was not paid according to law. Pingshan District Procuratorate initiated consultations with the tax authorities on the supervision of farmland occupation tax collection, and suggested that it strengthen communication and cooperation and information sharing with relevant functional departments to ensure that farmland occupation tax should be fully collected. After receiving the consultation letter issued by the procuratorial organ, the tax authorities responded positively, determined the declaration caliber of cultivated land occupation tax through investigation and study, and verified the situation of unpaid cultivated land occupation tax door by door, and recovered more than 720,000 yuan of cultivated land occupation tax.

On June 24th this year, the National Audit Office issued the Audit Report of the State Council on the Implementation of the Central Budget and Other Financial Revenue and Expenditure in 2024, which raised six questions in the audit of the central financial management, including that by the end of March 2025, the tax authorities had not established an effective data sharing and utilization mechanism, and the correlation analysis of tax-related data was not coordinated enough. Since 2021, a total of 72.423 billion yuan of taxes and fees such as farmland occupation tax have been collected less. At the same time, the Work Report puts forward audit suggestions, and it is clear that it is necessary to strengthen the collection and management of taxes and fees according to law, plug the loopholes in the system, and ensure that all accounts receivable are collected. After the audit put forward higher requirements for multi-department collaborative tax management and information sharing of farmland occupation tax, the tax collection and management of farmland occupation tax may face a more accurate and strict regulatory situation, and the related tax-related risks deserve taxpayers' further attention. In the following, we select three common types of farmland occupation tax-related issues in practice to discuss, for readers to screen and prevent and control related tax-related risks.

II. The temporary occupation of cultivated land needs to pay attention to the tax obligation of cultivated land occupation tax

A case published in China Tax News shows that tax officials in one place found that Company A occupied a large piece of woodland and garden due to the construction of the construction project during the inspection of tax sources. Further verification shows that Company A has obtained the approval of farmland occupation from relevant departments, including 23,418 square meters of forest land and 7,983 square meters of garden land. The approval period for temporary occupation is 10 months, but it has not reported and paid farmland occupation tax to the tax authorities. With the guidance of the tax authorities, Company A paid back the farmland occupation tax of 942,100 yuan according to law.

According to the Farmland Occupation Tax Law and its implementation measures, there are two kinds of farmland occupation tax. One is to occupy the farmland within the prescribed scope to build buildings and structures or engage in non-agricultural construction, and the other is to destroy the farmland due to excavation, mining subsidence, occupation and pollution. In the first case, whether it is temporary occupation or unauthorized occupation, it belongs to the scope of farmland occupation tax. Therefore, in this case, Company A temporarily occupies cultivated land due to the construction of the construction project, and shall pay the cultivated land occupation tax according to law.

It is worth mentioning that the tax obligation of farmland occupation tax occurs on the day when the taxpayer receives the written notice from the competent department of natural resources to handle the formalities of farmland occupation. In practice, some local competent departments of natural resources did not give the above written notice to the enterprises when making the decision to approve the land use, which led to some enterprises missing the tax declaration items of farmland occupation tax. In the subsequent treatment, the tax authorities usually take the time when the natural resources management department approves the land use as the time when the tax obligation occurs, and the enterprise may face extremely high late payment fees. Therefore, for the temporary occupation of cultivated land, enterprises should pay attention to the time when the tax obligation occurs and declare and pay taxes in time; If faced with the situation of overdue tax, we should pay attention to whether the time limit for tax collection has exceeded, and we can also strive for the late payment fee not to exceed the tax principal from the nature of the late payment fee, so as to reduce economic losses.

III. Returning farmland to reclamation needs to pay attention to the requirements of farmland occupation tax refund

Article 11 of the Cultivated Land Occupation Tax Law stipulates that "if a taxpayer reclaims cultivated land according to law within one year after the expiration of the period of approving the temporary occupation of cultivated land and restores the planting conditions, the paid cultivated land occupation tax will be refunded in full", and Article 18 of the Measures for the Implementation of Cultivated Land Occupation Tax further defines the temporary occupation of cultivated land and reclamation. "Temporary occupation of cultivated land refers to the act of using cultivated land temporarily for no more than two years with the approval of the competent department of natural resources. Reclamation according to law shall be determined by the competent department of natural resources in conjunction with the relevant industry management departments and issued a confirmation of acceptance. " In terms of tax refund procedures, according to the Announcement on Relevant Matters Concerning the Collection and Management of Farmland Occupation Tax (State Taxation Administration of The People's Republic of China Announcement No.30, 2019), taxpayers need to provide tax payment book, tax payment certificate and confirmation of reclamation acceptance when applying for tax refund. In practice, there are many disputes based on the temporary occupation period and the reclamation confirmation department. Take an administrative litigation case as an example:

The plaintiff, Company A, temporarily used grasslands due to construction needs in a photothermal power generation project, and went through the formalities for temporary use of grasslands on July 26, 2018. The temporary use period was from July 26, 2018 to July 25, 2020, and Company A paid a total of more than 97.49 million yuan in farmland occupation tax. In September, 2022, the local forestry and grassland bureau issued the Notes on the Restoration and Acceptance of Temporary Occupation of Grassland Vegetation to Company A, stating that Company A had restored the above-mentioned temporary occupation of grassland vegetation and assisted Company A in completing the refund of grassland vegetation restoration fee. Company A applied to the defendant's tax bureau for tax refund based on the statement and the tax payment certificate, and the tax bureau made a notice of tax matters to Company A, thinking that the statement "cannot be recognized as legal and will be recognized by the competent department of natural resources in conjunction with the relevant industry management departments and issue a confirmation of acceptance", so the tax refund will not be granted. Company A filed an administrative lawsuit to ask the tax bureau to refund the farmland occupation tax. The court held that Company A had an unapproved preemption, and the actual occupation time was more than 2 years; Moreover, the explanation issued by Forestry and Grassland Bureau is the basis for plaintiff A to obtain the refund of grassland vegetation restoration fee, and it is the confirmation of the plaintiff's project to restore grassland vegetation. It cannot be regarded as the acceptance confirmation stipulated in the Farmland Occupation Tax Law, so company A does not meet the conditions for tax refund and rejects the claim of company A.

The enlightenment of the above cases is that enterprises need to strictly grasp the tax refund conditions for temporary occupation of cultivated land to avoid facing huge economic losses because they do not meet the requirements: on the one hand, enterprises need to pay attention to the time limit for temporary occupation of cultivated land to avoid no tax refund for overdue occupation, and the tax authorities may calculate the time limit for temporary occupation from the time when the cultivated land is actually occupied; On the other hand, enterprises should also understand the law enforcement caliber of tax authorities and obtain the confirmation letter of reclamation acceptance that meets the requirements.

IV. Enterprises to carry out photovoltaic power generation projects need to pay attention to the farmland occupation tax payment obligations.

Under the background of vigorously promoting the goal of "double carbon", China's photovoltaic power generation industry has ushered in substantial growth. On June 23rd, the National Energy Administration released the statistical data of the national power industry from January to May this year. The installed capacity of photovoltaic power generation in China maintained a high-speed growth momentum, with a cumulative increase of nearly 200 million kilowatts, up 57% year-on-year, pushing the cumulative installed capacity of photovoltaic power generation in China to exceed 1 billion kilowatts, reaching 1.08 billion kilowatts.

In the tax-related field, there are many disputes about the farmland occupation tax of photovoltaic project land, especially in photovoltaic composite projects, where photovoltaic panels are erected at the upper level and agriculture, forestry, animal husbandry and fishery are developed at the lower level, and the land occupation of photovoltaic panel arrays often does not change the nature and function of the original land. At present, there is no unified regulation on whether farmland occupation tax is required and how to determine the tax basis. In terms of tax payment obligations, some local tax authorities believe that this situation has not affected the function of the land, and there is no need to pay the farmland occupation tax. For example, the Notice on Defining the Farmland Occupation Tax Policy for Photovoltaic Power Generation (No.915 [2015] of the Ministry of Finance) stipulates that "units and individuals engaged in the construction of centralized ground-connected photovoltaic power plants occupying farmland or other agricultural land, regardless of permanent occupation or leased occupation, shall be subject to farmland occupation tax. However, the farmland occupation tax is not levied on the land that has not changed the nature of the land and maintained its original agricultural and animal husbandry functions between photovoltaic panels of power stations. However, most tax authorities hold the attitude that farmland occupation tax should be levied, and even there are cases in which enterprises fail to declare and are qualitatively evaded. On the issue of tax basis, Yunnan Provincial Development and Reform Commission's Notice on Strengthening the Development and Construction of Photovoltaic Resources (No.785 [2023] of Yunfa Gai Energy) stipulates that "the standard for determining the taxable area of farmland occupation tax shall be standardized. For photovoltaic arrays that occupy agricultural land, the taxable area of farmland occupation tax is calculated according to the actual vertical projection area, and the vacant areas between photovoltaic arrays and between arrays are not subject to farmland occupation tax ",that is, the taxable area of farmland occupation tax is calculated according to the projection area, while some local tax authorities determine the taxable area based on the area confirmed in the documents issued by the competent department of natural resources, and some tax authorities calculate the vacant area between photovoltaic panels according to the land lease contract of photovoltaic power generation enterprises.

At present, the State Administration of Taxation has not issued relevant preferential tax policies on farmland occupation tax for photovoltaic projects. Before developing photovoltaic projects, enterprises should pay attention to the tax compliance of farmland occupation tax, clarify the caliber of local law enforcement, communicate with the tax authorities in time on the actual situation of farmland occupation, whether to change its use and function, and clarify the tax obligation and tax basis to avoid the situation of paying taxes and charging late fees.