On The Effects Of Replacing The Business Tax With Value-added Tax On Construction Enterprises And The Countermeasures

To replace business tax(BT) with a value-added tax(VAT) is an important tax reform during our “12th Five-Year Plan” period. It is not only a major part of our structural tax reductions, but also is an important measure to promote the transformation of the economic structure and accelerate sound and rapid development of our country. In 2012, the pilot reform that BT reforms to VAT was firstly implemented in Shanghai.With the deepening of reform, the plan that BT reforms to VAT has gradually expanded nationwide. More and more industries have already brought into the pilot program. The comprehensive promotion of the reformation of BT to VAT and the final replacement of business tax by value-added tax will be the main directions of our circulation tax reform.The construction industry is a national economy, and its leading role in the development of our national economy is obvious. At the present stage,the overall scale of China’s construction industry is increasingly expanding,but the development level is low and it is still in the stage of extensive development stage. The payment model of BT also has great influence on the development of construction industry in our country. It mainly represents in the aspects of duplicate taxation, tax burden,etc. In2011, it has clearly announced in the [2011]No.110 that Constitution industry must adopts 11% VAT tax. And this announcement makes "the plan that BT reforms to VAT" of construction industry to be put on theagenda. "The plan that BT reforms to VAT" of construction industry is imperative and imminent, which is necessary both for the industry itself and the development of national economy.This paper takes the GX construction company as the research object and studies the problems that construction enterprises will confront after implementing the plan that BT reforms to VAT combined with the characteristics of construction enterprises their own. Firstly, the research background and significance will be stated and the research design and methods are put forward next. Then, the main categories of taxes and current situation of tax burden of construction enterprises, advantages and disadvantages of the transformation of BT to VAT will be analyzed in detail. Secondly, this paper chooses a specific case——GX construction company. In this part, the basic situation tax-related situation will be introduced and the positive significance of the policy that BT reforms to VAT for the construction industry will be analyzed. Thirdly, in the terms of engineering project of GX company, the influence of the plan that BT reforms to VAT on engineering projects in construction industry will be analyzed from the perspectives of tax burden, cost, financial indicators,and management and administration of finance. At last, aiming at the problems that GX company will confront after BT reforming to VAT,some countermeasures and advisory opinions are provided. The preparatory work should be done with the start of enhancing individuals’ capability. Some countermeasures should be respectively proposed from the aspects of enterprises’ tax burden, cost, financial and tax planning should be put into effect in GX company after the implementation of the plan that BT reforms to VAT. In addition, some corresponding policy proposals also should be provided as the references for construction industry to implement the plan of BT reforming to VAT, in order to strengthen management of construction enterprises according to their own situation and adapt the influence of VAT as soon as possible.