An Analysis Of Corporate Vat Tax Planning Based On China Reformed Vat Regime

To boost domestic spending, to help firms tide over the financial turmoil, which started in the US since 2007, China launched value added tax (VAT) reform experiments in 2009. The reform was aimed at shifting from the former production-based to a consumption-based VAT regime, which would grant tax deductions on spending on fixed assets, scrap of policies that exempt imported equipment from VAT and deny foreign-funded firms tax rebates on domestic equipment purchase, putting them on an equal footing with domestic companies. As part of the 4 trillion yuan stimulus package, it was expected to reduce the tax burden on companies by more than 123 billion yuan in 2009.Corporate tax planning as an integral part of the overall business management,its ultimate goal is to maximize enterprise value. It is that taxpayers in the extent permitted by law, through the operation, investment, financial activities of the prior planning and arrangements, as far as possible to achieve cost savings of tax revenue receipts. VAT is a very important tax as there are very few sectors can avoid it in China. It is a tax with simple computations but many detailed rules to ensure its enforcement. To take full advantage of the tax concessions brought by the VAT reform for equipments investment, technological upgrading, taxpayers need to be every familiar with value-added tax laws, have a comprehensive understanding of the provisions of value added tax system, especially the various tax breaks, and have well planned tax planning.This thesis starts with the basic principles of tax planning and VAT tax burden with the premise that enterprise has a goal of maximizing its value, and then proposes that value-added tax planning have three-tier objective. After checking the changes in present VAT regime, analyzing the changes in VAT tax planning space and its impact on the VAT tax planning, discussing the current status and problems of VAT tax planning, considering the risk of tax planning, it suggests some VAT tax planning methods illustrated by some cases. It is aimed at providing enterprises both theoretical and practical guidance on Value-added tax planning.