October 12, 2017 Source: Sina News

       For photovoltaic enterprises, the "Notice" stipulates that the policy of VAT on photovoltaic power generation products will be refunded 50%, from December 31, 2018 to December 31, 2020. Experts said that photovoltaic power generation is at a critical stage of going to the Internet at a parity and out of subsidy development, which will provide strong support for the sustainable and healthy development of the photovoltaic industry.

       In recent years, China's renewable energy has achieved rapid development, the scale of the industry has grown rapidly, the cost of wind power and photovoltaic power generation has dropped significantly, and the competitiveness of the industry has been continuously strengthened. However, the tax burden of renewable energy enterprises in some areas is still heavy.

       According to the current Notice on the Continued Implementation of the VAT Policy for Photovoltaic Power Generation, the 50% discount on the value-added tax on photovoltaic power generation products will expire at the end of 2018. “VAT is an important part of the cost of photovoltaic power generation. After the expiration of the preferential policies in 2018, it will increase the burden on photovoltaic power generation enterprises,” said an industry source.

       There has been a call for tax reduction or tax exemption for PV projects in the industry, and the draft for comments has made the industry see good hopes. Zhuang Yinghong, director of Dongfang Risheng Marketing Department, said that one of the main measures to promote the parity of the photovoltaic industry is to reduce the cost of products. And measures such as reducing PV products and project land tax can reduce a large part of the cost of the product. The implementation of 50% tax rebate policy for photovoltaic products allows enterprises to increase investment in technology research and development, encourage enterprises to pay attention to product research and development, and improve production capacity and product quality.

       “Reducing the taxation of photovoltaic products and project land reduces the cost of the photovoltaic power supply side and the land cost, thus promoting the early realization of the electricity side and the power supply side parity online.” Yang Liyou, general manager of Jinneng Technology, said that for component manufacturers The decline in tax burden will be more conducive to the overall gross profit recovery of the photovoltaic industry and promote the development of enterprises.

       The reporter learned that at present, the power generation project that does not occupy the cultivated land and does not change the surface form still needs to pay the farmland occupation tax. For example, the photovoltaic power plants invested by Trina Solar in Xinjiang and Inner Mongolia are subject to the farmland occupation tax according to the total land area of the project, and the burden on enterprises is increased.

       To this end, the "Notice" clarifies that for photovoltaic power generation projects, the part of the photovoltaic array that does not occupy the land and does not change the surface form is exempt from the farmland occupation tax. Photovoltaic power generation projects using land construction within the scope of cities, county towns, towns, and industrial and mining areas shall be levied by provincial governments, and the towns shall not be levied on the land within the planned towns. The use of taxes; to meet the urban land use tax threshold, the part of the photovoltaic array does not occupy the land, does not change the surface form, does not count the occupied land area, exempt from urban land use tax.

       Although the draft for comment has given many preferential treatments to the taxation of photovoltaic power generation projects, it is unavoidable that the current definition of “photovoltaic project construction land” is not clear enough, the land needs to be coordinated and managed by multiple departments, and the tax execution standards are not unified. Still let a lot of PV companies "crash".

       "The above problems must be effectively solved. Whether it is a large-scale ground power station or a commercial and commercial rooftop power station, construction land is indeed the primary task of building a power station. If the above problems are not solved, it will affect the enthusiasm of enterprise development projects, so that many good projects are at the source. It is blocked." Zhuang Yinghong said that he is looking forward to more favorable policies and refinement, and strive to achieve parity online at an early date.

       For the time being, all kinds of land tax still occupy a certain proportion in the total cost of PV project development, which increases the burden on enterprises to a certain extent, and also delays the process of the industry entering the Internet. Zhuang Yinghong said: First of all, from the perspective of taxation, the entire industry needs the government to introduce favorable policies to support; once again, enterprises also need to take measures to reduce costs and increase efficiency, such as increasing product technology research and development, reducing product costs, and improving product power generation efficiency. Affordable Internet access requires companies to work together with the government and the market.

       In addition to giving preferential treatment on taxation, the Notice also clarifies that all localities should encourage banks and other financial institutions to lower the loan interest rate, which will help enterprises to reduce production costs to a large extent.