Research On The Influence And Trend Of “Change Business Tax To Added-value Tax” On Construction Enterprises

The reform program to replace the business tax(BT) with a value-added tax(VAT) in China is involved in a wide range of industry. The transformation is of great significance for construction business, considered the low margin and the difficulties to fully deduct input tax.VAT does not constitute the product price directly which produces lower intervention to the market. What’s more, VAT shows the character of tax neutrality and tax equity for it avoids double taxation effectively. This paper uses the method of combining theoretical research with case analysis, focuses on the influence of VAT reform in ZG Corporation from a microcosmic point of view. This thesis analyzes the change of tax burden, finance management and internal control caused by VAT reform. This thesis also provides suggestions on how to optimize policy and adjustments according to the basic theory and policy that BT reforms to VAT.The data used in this paper is acquired on a random sample of more than 800 projects from the case corporation nationwide. This study presents the fact that construction companies’ finance indicators will be affected directly by VAT reform, as well as the operating results and management means.This paper reveals the tax estimation that 9.9% descent on operating profit, 47% descent on revenue and nearly 40% ascent on tax burden after VAT reform, so as the varying decrease in the index of total assets and asset turnover. Higher requirements on the cash flow management, accounting, tax management, bidding management and cost control are put forward after VAT reform. This paper considers the analysis synthetically and provides suggestions both towards construction companies and the policy that BT reforms to VAT.