Research On The Impact Of“BT To VAT”on The Financial Performance Of Enterprises

The recent years have witnessed the fast development of Chinese economy and the service industry, as a major component of the tertiary industry,is playing an ever more important role in national economy of China. Since China in recent years has put forward the scientific development of fiscal and tax system, the policy of “replacing the business tax with a value added tax” has been another major reform in circulation tax system after the reform in consuming value added tax in 2009 and it has been an important way to promote the integrated development of the first industry and the second industry. The policy of “replacing the business tax with a value added tax” is piloted in transportation industry and some modern service industries in Shanghai from January 1, 2012 and is carried out from August 1, 2013 nationwide. This policy is carried out in railway transportation and the postal service from January, 2014. Those pilot enterprises have benefited from this policy, for example, the most obvious impact is the reduction of tax burden and the financial performance of these enterprises have been improved. The research on the impact that the policy of “replacing the business tax with a value added tax” has on the financial performance of enterprises and the analysis of whether this policy will bring benefits for the enterprises can give some suggestions on the comprehensive promotion of this policy and offer some effective strategies to those enterprises to be reformed. Therefore, this thesis is of great practical significance.This paper starts with the research background and, on the basis of previous researches, studies the impact that the policy of “replacing the business tax with a value added tax” has on the enterprises’ financial performance by integrating theoretical analysis, empirical analysis and case study. Firstly, this paper puts forward its theme and research status worldwide, makes a brief introduction of the frame and the methods used in this research and raises the possible creative points of this research.; Secondly, it makes a theoretical introduction about the policy of “replacing the business tax with a value added tax”, financial performance and transportation industry to lay basis for the following parts; thirdly, it analyzes the impact of the policy of “replacing the business tax with a value added tax” has on the enterprises’ performance and the influence factors with a normative research method and theoretically verifies that this policy will help to reduce the enterprises’ tax burden and improve their financial performance; Finally, it adopts the financial data of 45 listed companies in transportation industry in Chins from 2011 to 2013 as the empirical material to further the validation of the impact of this policy on the enterprises’ financial performance.The research result proves that there is noticeable correlation between the policy of “replacing the business tax with a value added tax” and the enterprises’ financial performance. This paper also makes a case study on the X Transportation Company by making a comparison on its financial data before and after the implementation of the policy of “replacing the business tax with a value added tax” and has verified the theoretical and empirical analyses above; also has offered some corresponding strategies. Lastly, there is a summary and an outlook of this paper.