In order to promote the sustained and healthy development of the comprehensive utilization of resources industry, on December 30, 2021, the Ministry of Finance and the State Administration of Taxation issued a notice on improving the value-added tax policy for the comprehensive utilization of resources (hereinafter referred to as the "announcement"). The announcement will be formally implemented on March 1, 2022. SMM analysis believes that the introduction of the special policy will further standardize the development of lithium recycling industry and help to support the development of formal recycling enterprises.
Standardize the development of lithium battery recycling industry
1) the announcement further clarifies the qualifications of enterprises participating in recycling: in line with the requirements of the measures for the management of recycling of renewable resources issued by the national department in charge of commerce, register the main body of the market, and complete the record of operators of recycling of renewable resources in the commercial department. This will help crack down on illegal lithium battery recycling players such as "black workshops".
2) the "announcement" details the relevant conditions for enjoying tax concessions: the "announcement" requires taxpayers to obtain the prescribed invoices or vouchers before they can be collected and refunded immediately; taxpayers should set up an account for the purchase of renewable resources and keep them for reference. This further refines the relevant conditions for enjoying tax concessions and ensures that recycling enterprises have "evidence to rely on."
3) the announcement puts forward more detailed requirements for the technical standards of recycled products: the announcement complements the technical requirements for lithium carbonate, lithium chloride, LiF, cobalt sulfate, nickel sulfate and lithium hydroxide; with regard to recovery, the announcement requires that the comprehensive recovery of nickel, cobalt and manganese should not be less than 98%, and the recovery of lithium should not be less than 85%. The types of recycled products are further refined to ensure the intensive utilization of resources and enable the production of lithium electric materials.
Support the development of formal recycling enterprises
Table 2-comparison of new and old announcements
1) for small and medium-sized formal enterprises in the process of recycling, since the suppliers of waste batteries are often units or individuals who are unable to apply for invoices, they can only issue general invoices, and at the same time, they have to pay 13% value-added tax, which cannot be deducted; and under the "announcement" simple tax law, enterprises can choose a simple tax calculation method and pay VAT according to 3%, which greatly reduces the tax burden of small and medium-sized recycling enterprises.
2) for the recycling enterprises that can apply for VAT invoices, the VAT rebate will be increased from 30% to 50%. The increase in tax relief paves the way for the rapid development of lithium recycling enterprises.
Click here to view the original announcement: notice on improving the value-added tax policy for the comprehensive utilization of resources
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