The second contract signing mode: if the EPC contractor only has any qualification or incomplete qualification in the survey, design, construction and equipment procurement qualification and scope of construction engineering, the EPC Contractor shall form a consortium to sign the EPC contract with the owner.
taxpayers are responsible for the tax after installation and operation The maintenance services provided by machinery and equipment shall be in accordance with “other modern services” Pay value-added tax.
Article 10 in the measures for the administration of general contracting of housing construction and municipal infrastructure projects (JSG [2019] No.
Article 12 of JSG [2019] No.
12), the term “general contracting” as mentioned in these Measures refers to the general contracting of engineering design, procurement, construction or design, construction and other stages by the contractor in accordance with the contract signed with the owner, and the quality, safety Organization and implementation of project construction with overall responsibility for construction period and cost.
Units that have obtained comprehensive qualification for engineering design, class a qualification for Industry and class a qualification for construction engineering can directly apply for class I qualification for general construction contracting of corresponding categories.
The units and individual industrial and commercial households engaged in the production, wholesale or retail of goods referred to in this article, including the units and individual industrial and commercial households mainly engaged in the production, wholesale or retail of goods and concurrently engaged in sales services, shall pay value-added tax in accordance with the relevant provisions on mixed sales for EPC project general contracting business According to Article 6 of the announcement of the State Administration of Taxation on clarifying several VAT collection and administration issues such as Sino foreign cooperation in running schools (Announcement No.
42 of the State Administration of Taxation in 2018), when general taxpayers provide installation services while selling self-produced machinery and equipment, they shall calculate the sales of machinery and equipment and installation services respectively (treated as part-time operations) , the installation service can be taxed according to the simple tax calculation method selected by the project provided by Party A.
Article 3 in the measures for the administration of general contracting of housing construction and municipal infrastructure projects (JSG [2019] No.
This operation mode is mainly applicable to those construction projects with strong professionalism, high technical content, complex process and structure and large one-time investment.
According to the previous tax law, the author believes that the tax risk difficulties of EPC general contracting contract are as follows: First, if the EPC contractor with the qualification and scope of survey, design, construction and equipment procurement of construction engineering directly signs the EPC contract with the owner (signing only one contract is a sales act in the tax law) , there is a tax risk whether it is recognized as mixed sales or part-time operation.
For the mixed sale of units and individual industrial and commercial households engaged in the production, wholesale or retail of goods, value-added tax shall be paid according to the goods sold; for the mixed sale of other units and individual industrial and commercial households, value-added tax shall be paid according to the sales services.
2.
First, the legal basis of bidding contract quotation of construction enterprises According to the notice of the general office of the Ministry of housing and urban rural development on making preparations for the adjustment of the pricing basis of the construction project of replacing business tax with value-added tax (jbb [2016] No.
12 encourages design units to apply for construction qualification.
Since the State Administration of Taxation has no clear provisions on how to deal with the tax of EPC general contracting business, some local tax bureaus recognize it as mixed sales, and some recognize it as part-time business, which has certain tax risk.
The general contracting performance of completed projects of corresponding scale can be reported as the performance of design and construction.
1.
The EPC Contractor shall have corresponding project management system and project management ability, financial and risk-taking ability, as well as design, construction or EPC performance similar to the contracted project.
Second, EPC general contractors with only any qualification or incomplete qualification in the survey, design, construction and equipment procurement qualification and scope of construction engineering form a consortium with multiple enterprises with incomplete qualification to sign EPC general contract with the owner, and the subcontracting of each consortium is agreed in the contract Working interface (equivalent to each consortium signing a contract with the owner) , if invoices are issued to the owner, subcontracting settlement is made, and the leader pays the funds of each Consortium on behalf of the consortium, the tax treatment must be carried out according to the concurrent operation behavior, and there is no tax risk.
（2） Tax risk control of EPC contract 1.
Construction units are encouraged to apply for engineering design qualification.
4) ） Article 2 and Article 1 of Document No.
Two contract signing modes of EPC contract According to Article 24 of the construction law of the people’s Republic of China, the contracting unit of a construction project may contract out the survey, design, construction and equipment procurement of a construction project to a general contracting unit, or contract out one or more of the survey, design, construction and equipment procurement of a construction project to a general contracting unit.
If the sales of machinery and equipment and installation services have been calculated separately according to the relevant provisions of concurrent operation, the installation service can be taxed according to the simple tax calculation method selected by the project provided by Party A.
Units with grade I or above construction general contracting qualification can directly apply for Grade A engineering design qualification of corresponding categories.
Based on the above laws and policies, the EPC contract can choose the following two contract signing modes according to the qualification of the general contractor: The first contract signing mode: if the EPC contractor has the qualification and scope of survey, design, construction and equipment procurement of construction engineering, the EPC contractor can directly sign the EPC contract with the owner, and then the EPC contractor can sign the survey, design, construction and equipment procurement with the professional subcontractor.
EPC contract, i.e.
general taxpayers provide installation services while selling purchased machinery and equipment.
Tax risk: tax shall be levied according to mixed sales or concurrent operation According to Article 40 of the measures for the pilot implementation of replacing business tax with value-added tax (CS [2016] No.
In the construction field, the financial and tax law risk control of EPC project is an important measure to improve the tax safety of construction enterprises engaged in EPC business! （1） Legal risk control of EPC Contract: different contract signing modes are selected according to the qualification of EPC contractor.
12), the general contractor shall have both engineering design qualification and construction qualification corresponding to the project scale, or a consortium composed of design units and construction units with corresponding qualifications.
The tax control strategy of EPC contract.
design, procurement and construction contract, is a general contracting mode including design, equipment procurement, construction, installation and commissioning until completion and handover.
39 of the State Administration of Taxation in 2019: “project cost = pre tax project cost × (1 + 9%)..
In order to solve the tax risk of EPC contract, the following methods are used for control: (1) Solve tax risks through accurate project budget estimation.
36 Annex 1): “If a sale involves both services and goods, it is a mixed sale.
