A Study On The Change Of Turnover Tax After Realization Of "Real Estate"

From January 1, 2012, Shanghai took the lead pilot in “Business Tax to VAT” reform in the transportation industry and part of the modern service industry. As an important measure to speed up reforms of the fiscal and taxation system during the “Twelfth Five-year Plan” period, “Business Tax to VAT” has a significant impact on upgrading of industrial structure, development of tertiary industry, specialization and cooperation, and optimization of business structure. Meanwhile, real estate industry is an important pillar of the national economy, it directly impacts the overall national economy growth, fiscal levy and people’s living standars. According to “On Deepening Economic Reform”, “Business Tax to VAT” should be completed at the end of 2015. So “Business Tax to VAT” in real estate industry is around the corner. Just under such a background, this paper focus on the tax burden changes in the real estate industry from two perspectives: quantity and time.Firstly, this paper analyzes the impact of “Business Tax to VAT” on the real estate industry from the perspective of quantity. I compare business tax with VAT, analyze the influence of these differences on tax burden, and establish a comprehensive analytical framework. This paper divides the influence into two parts: the tax increase because of a higher tax rate and the tax decrease because of the deduction of input tax. Based on the input-output tables, we know that the input-output level of the real estate industry is not high, as well as the level of deduction. So, real estate companies may pay more tax after the reform.Secondly, this paper conducts an empirical analysis on data from projet A of company A. According to the design formula, I calculate the output tax, the input tax and the tax amount payable. Compared with business tax, this project will pay more VAT.Thirdly, this paper analyzes the influence of “Business Tax to VAT” on the real estate industry from the perspective of time. In real estate industry, income is earlier than cost, land cost takes a high percentage of its total cost, projects are accounted separately, input taxes are disperse, and invoice is difficult to get. These characteristics make real estate companies pay a lot of tax in early period and pay little in later period. Because of the time value of money, this makes tax burden for real estate industry higher.Finally, the author puts forward some policy proposals. Land cost will be included in the scope of proceeds deductible, government will give preferential tax relief policy to social housing and ordinary housing, real estate companies should enhance its invoice management, pay VAT in advance for its advance sale income, and government should lengthen the period of deduction.