The country's first tax-related case involving certification of voluntary emission reduction trading opens
On the afternoon of June 3, the People's Court of Tongzhou District of Beijing City held a public hearing on two cases involving the plaintiff, a chemical company in Qinghai, and the defendant, an environmental protection technology company, the defendant, a low-carbon technology company, and the third party, Beijing Green Exchange Co., Ltd., in carbon emissions trading disputes. The case involved issues such as the tax burden of certified voluntary emission reductions (hereinafter referred to as CCER) transactions and was the first tax-related case in the country for CCER transactions.
The plaintiff Qinghai Chemical Co., Ltd. claimed that on November 16, 2021, the company signed the "Beijing Green Exchange Certification Voluntary Emission Reduction Admission Agreement" with Beijing Green Exchange Co., Ltd., stipulating that it will participate in the Beijing Green Exchange. The trading platform of the company participates in CCER transactions. Later, the company purchased CCER from an environmental protection technology company and a low-carbon technology company through the trading platform of Beijing Green Exchange Co., Ltd., and the transaction has been completed. A chemical company in Qinghai believed that a certain environmental protection technology company and a certain low-carbon technology company should issue a special value-added tax invoice of corresponding value based on the transaction amount, and requested to issue a corresponding special value-added tax invoice for the value of the CCER purchased, but was rejected.
The defendants, an environmental technology company and a low-carbon technology company, argued that the dispute involved in the case should not be relieved through civil litigation, and the court should reject the lawsuit. If the court believes that the case can be relieved through civil litigation, the two defendants do not have the obligation to invoice if the trading platform and the parties to the transaction have not agreed on the obligation to invoice and whether the transaction price includes tax, and the nature of CCER is similar to that of financial assets. According to relevant laws and regulations on value-added tax, and with reference to relevant regulations on financial asset transaction management, value-added tax invoices should not be issued, so the court should decide to reject the claim of a Qinghai chemical company. If the court ruled that the two defendants were obligated to issue invoices, according to transaction practices and the principle of fairness, the corresponding value-added tax should be borne by a Qinghai chemical company.
The third party, Beijing Green Exchange Co., Ltd., stated that there is no obligation to withhold and pay the value-added tax related to the transaction involved in the case, and the trading platform has not deducted any tax. Beijing Green Exchange Co., Ltd. should not bear corresponding billing obligations for the transaction involved. The CCER transaction involved in the case is a spot transaction in the carbon market, which is obviously different from financial commodities. If there is no clear stipulation that the transaction is a non-taxable or tax-exempt item, the CCER transaction should fall within the scope of VAT. Combined with relevant regulations and relevant opinions from the competent authorities, CCER transactions should be invoiced by the payee, and the relationship between the invoiced amount and the transaction price depends on the agreement between the transaction entities. The two parties to the transaction have not previously agreed on whether the transaction price is tax-inclusive. They usually need to make a comprehensive judgment based on the nature and purpose of the act, transaction practices, and the principle of good faith. The specific determination will be made by the court to provide rules and guidance for the market.
According to the defendant's statement in the trial, a chemical company in Qinghai reached a CCER transaction of 4,537,898.2 yuan with an environmental protection technology company and a CCER transaction of 195000 yuan with a low-carbon technology company.
The presiding judge presided over the court debate among all parties around the focus of the dispute and fully listened to the opinions of all parties. The reporter learned that the two cases will be pronounced on an elective basis after deliberation by the collegial panel.
