Dan Wang, Zihong Yang

(School of Economics and Trade, Hunan University of Technology)

Abstract：

The PPP model has become an important way to transform government functions, better leverage the role of the market in resource allocation, and alleviate the scale and pressure of local debt. As PPP projects gradually enter the operation period, the tax treatment issues related to government payments during the operation period designed in the PPP related contracts and cooperation agreements in the early stage have begun to emerge, mainly involving value-added tax and corporate income tax on payments. The payment of PPP projects is crucial for social capital participation, project operation, and ultimately smooth handover. The payment of PPP projects is a long-term cooperative contract between government procurement and social capital to provide goods and services, in order to achieve the recovery of construction costs and the coverage of operating costs, management expenses, and reasonable profits. There are mainly three methods: user payment, government payment, and feasibility gap subsidy. At present, there are still blank areas in the tax policies for PPP projects in China, and different payment methods for projects have also caused difficulties in the tax treatment of obtaining operational compensation. Based on practical cases, identify existing problems and attempt to propose reasonable solutions in order to standardize the payment mechanism and tax issues of PPP projects.

Key Words：

PPP model; government payment; feasibility gap subsidy