Study On The Tax Legislation Of Business Tax Replaced With Value-added Tax In China’s Financial Industry

The financial industry has an irreplaceable position in national economy chain. What kind of taxation law should be applied to the financial industry determines the stability and prosperity of the market economy in the future.At present our country is in the implementation of "Business Tax Replaced with VAT", the financial industry will also be included in the tax reform. However, which kind of tax law should be applied in the financial industry seems to be a very difficult problem. On one hand, it is necessary to integrate with the international practice, and it has to consider the actual situation of our country. On the other hand, it needs to consider the special nature of the financial industry, the pressure of local finance formed in financial reduction of income, and the great impact of the tax burden on banks, insurance and securities, the three major financial sectors.This paper first analyzes the problem of the business tax levied in China’s financial industry currently, and points out the necessity of the tax reform in the financial industry. Secondly, it specifies the importance of value-added tax be levied in the financial industry combined with the background of "Business Tax Replaced with VAT" in China, and also puts forward the difficulties may exist in the progress. Then, it compares several typical modes of value-added tax legislation in financial industry internationally, and points out some legislative enlightenment we can take as reference. Finally, as is the core part of the article, the paper gives specific design of legislative element from aspects such as taxpayer, scope of taxation, tax rate, tax preferences, the mode of taxation and tax jurisdiction for "Business Tax Replaced with VAT" of China’s financial industry. The highlight is on the mode of taxation. The paper also gives legislation proposals on how to impose value-added tax on China’s financial industry, in order to achieve the balance between national tax revenue and the financial industry’s international competitiveness.The paper tries to combine the current environment of China’s "Business Tax Replaced with VAT" and the special situation of financial industry. Through analyzing of several international typical legislation practices, it absorbs the essence. In the process of tax reform, it considers several factors such as the influence on society and economy, the operability, fiscal revenue and cost of supervision, in order to constantly improve the tax reform of financial industry in the level of tax law construction and put forward the theoretical basis of "Business Tax Replaced with VAT" in financial industry. This paper makes efforts to set up a value-added tax law for our country’s financial industry, which is simple to apply in practice. It can promote the process of "Business Tax Replaced with VAT" in financial industry, avoid double taxation of the financial industry, solve the problem of over-tax-burden and unfair tax, and increase international competitiveness of China’s financial enterprises.