Research On Influence Of “Business Tax To Vat” Reform On Real Estate Development Enterprise

Since early 2012,the tax reform of business tax to value added tax was firstly taken in Shanghai,it has proceed smoothly.Up to now,industries having not entered “Business Tax to VAT” reform,which has produced a remarkable effect on reducing the tax burden of enterprises,remain only the construction industry,the real estate industry,the financial industry and the consumer service industry.According to the government work report by Li Keqiang in 2016,“Business Tax to VAT” will start from May1,2016, It will extend to the construction, real estate, financial services, consumer services, and all companies included in the deduction of VAT contained in the new range of real estateThis thesis starts with the positive analysis of 30 real estate development listed companies’ tax burden before and after “Business Tax to VAT ”reform.Change of the tax burden is calculated by a model based on operating revenue and costs of these companies.After that,this paper takes A Estates for example,analysis changes brought by the reform in tax burden,business results,financial position and cash flow of this company.Results of analysis on tax burden changes brought by “Business Tax to VAT”reform shows that companies’ tax burden changes are influenced by the VAT rate and the credit rate of input tax.The higher the VAT rate is,the heavier tax burden real estate enterprises will face.At the same time,a lower credit rate of input tax will increase the tax burden of enterprises.Besides,specific to different enterprises,those who have higher operating profit ratio will get more tax burden reduction from the reform.Take into account the objective of both reducing enterprises’ tax burden and guaranteeing government tax revenue,the implementation rate of 11% is more scientific and reasonable.According to international practice,land use right should be deductible.In part of analysis on A Estates,the result shows that the reform will reduce the company’s tax burden,accordingly reduce its operating revenue and operating costs,increasing net profit of the company. Besides,the reform makes the company able to reduce funds paid in fixed assets and inventory.With tax payments decreasing,the company’s operational cash flow gets improved.