Research Of VAT Reformation Effect On Construction Enterprise

Business tax has a lot of problems in the current economic climate，so our countrybegan VAT reformation from2011. According to the plan, VAT reformation will carryout a three-step plan. Construction industry will join VAT reformation in the near future.VAT doesn’t consist in product price directly, it has less intervention to the market,and VAT eliminated double taxation. Relative to business tax, VAT is more aligned withtax neutrality principle. Because of eliminated double taxation, this tax reformincarnated the pursuit of equity principle when designing taxation system. Constructionenterprise has a low profit margin, the change of tax system will have a great influenceon it. The research of VAT reformation effect on construction enterprise before taxreform will have exceptional significant to both theory and practice.This paper made a brief contrastive analysis of VAT tax and business tax. Combinewith pilot policy, this paper briefed the VAT reformation tendency. on this basis，thispaper analyzed the tax reform effect on financial indexes of construction enterprise frommacroscopic and microscopic view. Macroscopic view analyzed the constructionindustry tax burden variation at industry level. Microscopic view analyzed operatingincome, cost, tax burden, net profit variation of construction enterprises. For calculatethe financial indexes variation more exactly, this paper take a construction project asexample, identified the cost which can get input VAT credit and corresponding incometax rates, then estimated the ratio of cost which can get input VAT credit, but it’s notclear labor cost can get input tax credit or not at present. This paper use the data of58listed construction enterprises analyzed financial indexes variation when labor cost canget input tax credit and can’t get input tax credit respectively. Then, this paper analyzedtax reform effect on operation management of construction enterprise, analysis focus onorganizational structure, financial accounting, tax planning, commercial intercourse,accounting treatment, money management and VAT invoice management.This study found, because of higher intermediate input rate, construction industrytax burden will decline after tax reform. But, the input tax credit which constructionenterprise actual get is far lower than theoretic, so construction enterprise tax burdenwill rise after tax reform. Form construction enterprise perspectives, operating incomeand cost of construction enterprise will decline after tax reform, tax burden and netprofit variation depends on operating income, input tax credit and VAT rate. Through case study, this paper found, when VAT rate is11%, if labor cost can’t get input taxcredit, after the reform, construction enterprise tax burden will rise, and net profit willdecline, average equal tax burden ratio is below11%,； If labor cost can get input taxcredit, tax burden and net profit before tax reform and after tax reform are essentiallysame, average equal tax burden ratio is close to11%.Combined the results of theanalysis, this paper made suggestions to VAT reformation policy and point out copingstrategy of construction enterprise.