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Analysis of Evershine possible role in the ESG ecosystem

#ESG #AssuranceReport #CBAM #EORI #DDP #NonResident #VAT #JCT


What is the international consensus on energy conservation and carbon reduction ?

The current international consensus on energy conservation and carbon reduction is to imitate the concept of business tax that has a history of 50 years and is currently implemented in 170 countries. There is sales carbon consumption when selling, and input carbon consumption when purchasing. The carbon consumption to be paid the tax is (output carbon consumption amount minus input carbon consumption) multiplied by the carbon tax price per unit.

What are implementation details of energy conservation and carbon reduction internationally ?

Regarding the implementation of details , the EU has fired the first shot!
Evershine has been providing EU CBAM declaration services for many Taiwanese companies in the past six months . From the declaration process, we have seen clues and understood the carbon tax plan in the future world.
EU CBAM filing began in the fourth quarter of last year .
The EU will begin to levy carbon tariffs on January 1, 2026, 20 months from now, carbon tariffs will be levied based on carbon consumption multiplied by the unit price per ton of carbon.
The carbon taxes or fees that have been levied in the exporting country , including the carbon consumption of imported raw materials that have been levied overseas, will be able to be deducted .
The requirements is that the exporting manufacturer must provide officially recognized documents in its name .
Taking Taiwan as an example, the Ministry of Environmental Protection levies a carbon fee . Enterprises must produce officially recognized documents that have been levied a carbon fee by the Ministry of Environmental Protection before they can use it as a deduction when declaring to the EU CBAM .

Other countries, such as the United States, Japan, etc., will follow the EU CBAM mechanism although it might have slightly difference.

What is the overall mechanism that Taiwan needs to establish in response to EU CBAM?

Taiwan must establish four mechanisms before December 31, 2025: Otherwise, Taiwan’s manufacturers will have to pay domestic carbon fees, and they must pay carbon tariffs when exporting to the EU. They will have to pay double carbon taxes , and their export competitiveness will be greatly affected.
(1) 287 major carbon emitters that are first levied a carbon fee , such as Taipower, China Petroleum Corporation, China Steel, Cement, Aviation, and Tap Water, must publish their unit carbon emissions .
(2)The carbon consumption of imported goods that have been levied a carbon tax overseas can be deducted. Taiwan customs should also establish a system for levying a carbon tax.
(3) Secondly, each enterprise must allocate the input carbon consumption to the products it produces, just like the cost allocation step in cost accounting.
(4) Finally: an accounting firm needs to verify the carbon consumption and issue a verification report. This should also be part of the internationally recognized document.

Other countries such as the United States, Japan, etc. will follow the EU CBAM mechanism, so the mechanisms that should be established in the same way.

What role might CPA accounting firms play in the ESG ecosystem?

There are two types of carbon consumption assurance Assurance reports from accounting firms :
one is the carbon consumption calculation Assurance report in the ESG sustainability report .
One is the product -based Assurance report of the carbon consumption , which is used in cross-border export declarations .
All accounting firms can provide the above-mentioned Assurance reporting services .

Analysis of Evershine possible role in the ESG ecosystem?

(1) Help with EU CBAM declarations and carbon tariff declarations from other countries such as the United States, Japan, etc.
Evershine parent company and 29+ overseas subsidiaries already provide international tax services overseas.
(2) Help set up non-resident tax number and VAT certificate number and import and export license number to prevent the production formula from leaking to European importers . In the process of assisting in applying for EU CBAM, we found that the Taiwanese manufacturers were a little worried and sent the production formula If it is leaked to European importers, we will help Taiwanese companies use their names to choose a country in the EU, such as the Netherlands, to apply a Non-resident tax number and business tax VAT certificate number, and then use the VAT certificate number to apply for the EU Customs import and export number EORI.
In this way, Taiwanese companies can act as importers themselves, the transaction payment terms are DDP (Deliver duty paid ), and they can declare customs by themselves.
(3) Among the two types of carbon consumption assurance Assurance reports that all accounting firms can serve , Evershine has a strong advantage in product -based Assurance report of the carbon consumption required when reporting cross-border carbon consumption .

Drafted by Dale Chen for Evershine Monthly Meeting 20240507

Contact us:

Accountable CPA : Judy Wang
wechat ID:Judy_Evershine

Evershine affiliates Information

Evershine has 100% affiliates in the following cities:
New YorkSan FranciscoHoustonPhoenix
TokyoSeoulHanoiHo Chi MinhBangkok,
SingaporeKuala LumpurManilaDubai,
New DelhiMumbaiDhakaJakarta,

Other cities with existent clients:
Miami, Atlanta, Oklahoma, Michigan, Seattle, Delaware;
Berlin, Stuttgart; Prague; Czech Republic; Bangalore; Surabaya;
Kaohsiung, Hong Kong, Shenzhen, Donguan, Guangzhou, Qingyuan, Yongkang, Hangzhou, Suzhou, Kunshan, Nanjing, Chongqing, Xuchang, Qingdao, Tianjin.

Evershine Potential Serviceable City (2 months preparatory period):
Evershine CPAs Firm is an IAPA member firm headquartered in London, with 300 member offices worldwide and approximately 10,000 employees.
Evershine CPAs Firm is a LEA member headquartered in Chicago, USA, it has 600 member offices worldwide and employs approximately 28,000 people.
Besides, Evershine is Taiwan local Partner of ADP Streamline ®.
(version: 2022/03)

Please contact us by email : HQ4TPE@evershinecpa.com

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