To promote the sustainable and healthy development, comprehensive utilization of resources industry issued by the Ministry of Finance, state administration of taxation on the improve the comprehensive utilization of resources of value-added tax policy announcement (announcement no. 40, 2021) of the taxation administration of the Ministry of Finance (hereinafter referred to as the “bulletin” 40), clear since March 1, 2022 to implement new comprehensive utilization of resources value-added tax policy.What are the major changes in the announcement no. 40 compared with the original comprehensive utilization of resources value-added tax policy?What is the impact on the development of scrap steel industry and even the whole steel industry?As March 1 draws near, here’s the analysis of the document for you:(here have add small program, please go to today’s headlines client view) to increase the choice of renewable resources recovery taxpayers tax method in VAT general taxpayer selling its acquisition of renewable resources recovery of renewable resources, may elect in alternative to apply the simple tax calculation method to calculate and pay VAT in accordance with the 3% levy rates, or apply generally pay VAT tax calculation.Q: What are the differences between the two tax methods and what are their implications?Answer: Simple tax is calculated according to 3% of sales excluding tax, and the input invoice can not be deducted;And general plan tax method, it is to plan tax by output tax – 13% of the increment part of input tax.Renewable resource recycling taxpayers can choose simple tax calculation to reduce their tax burden.Of course, the choice of simple tax method needs certain qualifications.Enterprises engaged in scrap recovery, processing, trade can choose simple tax, issue 3% VAT invoice.For enterprises in line with the access to scrap steel processing of the Ministry of Industry and Information Technology, 3% VAT invoice can be accepted to a certain extent and 13% output invoice can be issued because they can enjoy the policy of refunding on demand. The value-added VAT can be refunded on demand.But for steel mills, because timber sales is issued 13% of the sales invoice, if the input invoice is 3%, the increase in value-added tax is obvious, steel costs are bound to increase, or by depressing the scrap purchase price to transfer.(here have add small program, please go to today’s headlines client view) emphasizes the physical nature of the renewable resources processing renewable resources mentioned in this notice refers to the process of social production and living consumption, has lost all or part of the original use value, through recycling, processing, can make its regain use value of waste.Among them, processing is limited to cleaning, sorting, crushing, cutting, disassembling, packaging and other simple processing to change the density, humidity, length, thickness, hardness and other physical properties of renewable resources.Q: Different from previous documents?Answer: the emphasis is on the physical properties of the processing, including the simplest processing operations, such as selection, cleaning and so on.It is stipulated that the financial departments and competent authorities at all levels and their staff shall be held responsible for illegal financial returns, awards and subsidies to taxpayers engaged in renewable resources recovery business. In case of illegal financial returns, awards and subsidies to taxpayers engaged in renewable resources recovery business, corresponding responsibilities shall be investigated according to law.Q: What does that mean?Answer: Local government return VAT may become a history, local financial subsidies will be blocked;After the new policy for scrap steel industry, and only the Ministry of Industry and Information Technology access base has a tax rebate policy.Relevant policies and regulations will make financial rebates, awards and subsidies more targeted and standardized.The newly added conditions for the tax rebate for comprehensive utilization of resources mainly include: first, the purchase of renewable resources should obtain legal vouchers, failing to obtain legal vouchers according to provisions, the sales income shall not be refunded;Second, the establishment of the acquisition ledger and detailed requirements on the contents of the ledger are required to urge the renewable resource recovery enterprises to comprehensively collect and record the information of the acquisition of renewable resources, which provides a basis for the tax authorities to verify the authenticity of the enterprise business through follow-up management.The relaxed conditions mainly include: First, the hazardous waste Operation Permit is issued by provincial and above environmental protection departments, and then it is issued by provincial or municipal ecological environment departments;Second, the amount of environmental protection and tax penalties for tax rebates shall be increased from 10,000 yuan to 100,000 yuan, and the starting time for tax rebates shall also be adjusted from “within 36 months after the punishment decision is issued” to “the VAT policy as stipulated in this announcement shall not be enjoyed within 6 months after the punishment decision is made”.However, if there are more than two cases as stipulated in Item 7 of Article 3 (2) of No. 40 announcement within 12 consecutive months, the taxpayer shall not enjoy the policy of levying and refunding VAT as stipulated in the announcement within 36 months from the month when the second penalty decision is made.It is expected that the above changes will leave scrap processing enterprises with two choices:The first case, all request the supplier to bring my ticket delivery, choose simple tax, open 3% value-added tax invoice to steel mills, this case cannot drawback, steel mills facing extra 10% value-added tax cost, although can take advantage of the purchase price adjustment, but don’t get any discount, as a result, steel mills big probability would not be willing to accept the 3% of the invoice;The second case, scrap steel processing enterprise can ask the supplier to establish a recycling companies access to bring my ticket delivery, or set up a recycling company from the supplier, the goods for the supplier as an individual and industrial and commercial door or small-scale taxpayers to bring my ticket to supply recycling companies, recycling companies choose simple tax, open access to 3% of the ticket sales for enterprises,Access enterprises to open the invoice of 13% to the standard list of steel mills, tax rebate 30%, so for steel mills, can enjoy most of the benefits of tax rebate through price adjustment, may become the choice of most steel mills.Scrap steel is an important ferric raw material in the iron and steel industry. It is the only ferric raw material that can replace iron ore in large quantities. It is also a green renewable resource that can be recycled indefinitely.One ton of steel produced from scrap saves 1.65 tons of iron ore, reduces energy consumption by 350 kilograms of standard coal, consumes 1.7 tons of fresh water, and reduces CO₂ discharge by 1.6 tons and solid waste discharge by 3 tons.Using scrap steel as raw material for steelmaking is not only the need of adjusting the structure of the steel industry and reducing carbon emissions, but also the need of enhancing resource security capacity by reducing raw ore demand, and the urgent need to achieve the goal of “double carbon” in the steel industry.With the implementation of various policies, scrap steel in the scale of the outbreak period, policy support dividend period, industry integration and promotion period.In recent years, the invoice issue of scrap recycling has always been a difficult problem. For local interests, some regions give financial refunds, rewards and subsidies to taxpayers engaged in scrap recycling and other renewable resources recycling business, resulting in the proliferation of false invoices for renewable resources.It has seriously jeopardized the legitimate utilization market of renewable resources, disturbed the order of tax collection and management, caused great losses to the enterprises utilizing renewable resources, and also brought negative impact to the scrap steel industry and even the steel industry.The introduction and implementation of the Notice on Improving the VALUE-ADDED tax Policy on comprehensive Utilization of Resources is a positive signal, which will standardize the tax collection and management of renewable resources recycling and utilization, so that the interests of real recycling enterprises can be guaranteed, and lawbreakers have no place to escape!The implementation of this policy will effectively guarantee the resource safety of the steel industry, and help the steel industry to improve the level of green development, and help promote the high-quality development of the steel industry.(Small program has been added here, please go to toutiao client to check) Steel Mill News: On February 20th, Xu Steel adjusted the ex-factory price of some products, based on “Xu Steel construction steel price stable on February 19th”, the adjustment is as follows:Rebar steel to maintain the base price of the previous period is not adjusted, now the φ 16-22mm HRB400E executive price is 4750 yuan/ton, THE φ 12mm HRB400E executive price is 4880 yuan/ton, the φ 14mm HRB400E executive price is 4810 yuan/ton,φ 25mm HRB400E executive price is 4780 yuan/ton, φ 28-32mm HRB400E executive price is 4830 yuan/ton;The above adjustments are tax inclusive and the implementation date is from February 20, 2022.Steel Mill News: On February 20th, Laigang Yongfeng adjusted the ex-factory price of some products, based on the “February 19th Laigang Yongfeng construction steel price increase of 20 yuan/ton”, the specific adjustment is as follows:1, rebar steel to maintain the base price of the previous period is not adjusted, now φ 18mm, φ 22mm HRB400E executive price is 4790 yuan/ton, φ 10mm HRB400E executive price is 4940 yuan/ton, φ 12mm HRB400E executive price is 4920 yuan/ton,φ 14mm HRB400E strike price is 4890 yuan/ton, φ 16mm, φ 20mm, φ 25mm HRB400E strike price is 4860 yuan/ton, φ 28mm, φ 32mm HRB400E strike price is 4920 yuan/ton,φ 36-40mm HRB400E executive price is 5090 yuan/ton, φ 18mm, φ 22mm HRB500E executive price is 5050 yuan/ton;2. The base price of screw in the previous period is not adjusted. The strike price of φ 8-10mm HRB400E is 5090 yuan/ton, the strike price of φ 6mm HRB400E is 5590 yuan/ton, and the strike price of φ 12mm HRB400E is 5290 yuan/ton.φ 8-10mm HRB500E executive price is 5290 yuan/ton;3, high line to maintain the base price of the previous period is not adjusted, now the φ 8-10mm HPB300 executive price is 5090 yuan/ton, φ 6mm HPB300 executive price is 5390 yuan/ton, φ 12mm HPB300 executive price is 5290 yuan/ton;The above adjustments are tax inclusive and the implementation date is from February 20, 2022.Steel Mill News: On February 20th, Shiheng Special Steel adjusted the factory price of some products based on the “Shiheng Special Steel construction steel price increased by 20 yuan/ton on February 19th”. The specific adjustment is as follows:1, rebar steel to maintain the base price of the previous period is not adjusted, now φ 18mm, φ 22mm HRB400E executive price is 4790 yuan/ton, φ 10mm HRB400E executive price is 4940 yuan/ton, φ 12mm HRB400E executive price is 4920 yuan/ton,φ 14mm HRB400E executive price is 4890 yuan/ton, φ 16mm, φ 20mm, φ 25mm HRB400E executive price is 4860 yuan/ton, φ 28-32mm HRB400E executive price is 4920 yuan/ton,φ 36-40mm HRB400E executive price is 5090 yuan/ton, φ 18mm HRB500E executive price is 5050 yuan/ton;2. The base price of screw in the previous period is not adjusted. The strike price of φ 8-10mm HRB400E is 5090 yuan/ton, the strike price of φ 6mm HRB400E is 5590 yuan/ton, and the strike price of φ 12mm HRB400E is 5290 yuan/ton.φ 8-10mm HRB500E executive price is 5290 yuan/ton;3, high line to maintain the base price of the previous period is not adjusted, now the φ 8-10mm HPB300 executive price is 5090 yuan/ton, φ 6mm HPB300 executive price is 5390 yuan/ton, φ 12mm HPB300 executive price is 5290 yuan/ton;4, round steel maintain the previous period base price is not adjusted, now φ 12-16mm HPB300 round steel strike price is 4990 yuan/ton.The above adjustments are tax inclusive and the implementation date is from February 20, 2022.