Tax Burden Research Of "Business Tax To VAT" Reform On Real Estate Industry

From January1,2012, Shanghai took the lead pilot in "Business Tax to VAT" reform in service sector. As one of the most important taxation reforms,"Business Tax to VAT" has a significant impact on growth in all aspects of the tax burden, economic growth, optimization and upgrading of industrial structure, such changes is also associated with the people’s living standards. Meanwhile, as an important pillar industry of the national economy, the real estate industry also takes impact on the development of upstream and downstream industries. According to the government’s plan, the real estate industry will be included in the pilot of "Business Tax to VAT" reform in recent years.This paper focus on the tax burden changes in the real estate industry. Firstly, in the policy level, the paper gives a brief description to the current real estate business tax policy. China’s current real estate business tax is relatively complex and not conducive to tax management, which also has a serious problem of double taxation. With respect to the characteristics of tax neutrality, VAT tax is able to solve the problem of double taxation as well as simplify the tax system.This paper tries to establish a comprehensive analytical framework in the theoretical part. The paper divide the tax burden into the nominal tax burden, the tax shifting, and the actual tax burden. Based on a combination of actual situation of the real estate and input-output tables, the nominal tax rate of VAT can be interpreted by tax increases and deductible effects. As the Input-output level of the real estate industry is not high even all purchased goods and services can all be deductible, the deductible tax proceeds may still be limited. Moreover, the real estate companies can pass on the tax burden forward buyers by raising prices. However, real estate companies can also lower the tax burden on tax evasion.As the theory part fails to accurate the tax effect of the tax refonn, this paper additions Financial Analysis of listed companies and computable general equilibrium (CGE) model to further explore this issue. Combined with Treasury officials on the scope of VAT deduction statements, this paper included land and buildings into the deductible range. The results show that if the "Business Tax to VAT" reforms, the applicable rate is11%and13%, which causes the less impact on both the government and the companies.However, to reflect the impact on economic growth and residents’ welfare, this paper uses a more mainstream academia CGE model for this to be explored. Under the basis of LHR standard CGE model paradigm, this paper established research model. The results showed that the tax reform can increase the total output of the industry, GDP, resident’s welfare, but the government revenue would be reduced. This paper argues in static analysis results, the implementation rate of11%and13%would be a more reasonable compromise.In the last part of this paper, the system real estate for sale on the VAT treatment of some countries is to be discussed and summarized. The definitions of real estate always consist of various types of land. In addition, commercial real estate is as VAT-deductible, but generally do not have to live with the estate tax for housing. The VAT tax of real estate for commercial purposes is deductible proceeds.Finally, on the basis of the theoretical analysis, foreign reference and empirical analysis, the author puts forward some policy proposals, including the division of the tax in accordance with the nature of real estate, real estate and land use rights will be included in the scope of proceeds deductible, reform should commence by region, the implementation rate of11%or13%is more reasonable, and the reconstruction of the main taxes and other local government system.