Research On ICBC XX Branch's Tax Burden And Earning Power Impact Of The Business Tax Reform To Value-added Tax

The business tax to value added tax transformation is considered the most significant tax system reform of China since 1994. It aims to resolve the double taxation and unfair taxation issues caused by the co-existence of business tax and value added tax, thereby furthering the perfection of taxation system, implementing the structural tax reduction and promoting the structural transformation of economy.The business tax to value added tax transformation pilot have been launched since 2012, and since August 1 2013 the tax transformation in transportation sector and part of the modern service sector has been expanded nationwide. Despite that the banking industry plays an important role in the service sector, it has not been included in the tax transformation pilot plan, and has still been facing heavy tax burden and double taxation, which makes the tax transformation of banking industry a more urgent need.The dissertation chooses XX branch of Industrial and Commercial Bank of China (ICBC) as the subject for case study. The first chapter will give a literature review of current studies on the business tax to value added tax transformation in general first and then specifically of the banking industry. The second chapter will propose an hypothetical case of XX bank under the business tax to value added tax transformation, in accordance with the tax neutral theory and the, using the financial date of XX bank from 2011 to 2013. The financial situation of the bank before and after the hypothetical tax transformation will be compared and analyzed.In the third chapter, it will first give an analytical discussion on the current structure of taxation system of the banking industry in China, and the necessity and feasibility of the business tax to value added tax transformation of the banking industry; it will then examine the turnover tax burden of ICBC XX branch in the last three years as the precondition of the hypothetical tax transformation, and calculate the value added tax burden of the last three years after the hypothetical tax transformation. The forth chapter will make a comparison between the total tax burden before the transformation and after the transformation, and investigate the influences the transformation have on the earning power of ICBC XX branch. In the fifth chapter, the problems ICBC XX branch has when going through the tax transformation will be pointed out; and strategies of coping with the problems will be proposed in detail, which are firstly to strengthen the internal management of banks and positively face the business tax to value added tax transformation, secondly to improve the managerial ability and earning power of banks, and thirdly to enhance the tax-management ability and the coping capacity for the tax transformation.