Study On Effect Of The Business Tax Into Vat To Transportation Industry Listed Company Financial Performance

Conversion from Business tax to VAT is the significant element in Chinese Tax Reform, also regarded as major way for macro-control. In the 13th Five Year Plan, it emphasizes that "to finish the conversion form business tax to VAT", "to form normative and complete consumption-oriented VAT system", and "to build rational, fair and legal tax system" are very important. As the pilot industry about conversion from Business tax to VAT, transportation industry has achieved satisfying results since 2012.In order to study the conversion the effect about this conversion on corporate financial performance, this article selects list companies about transportation industry in pilot area in 2012 and takes the data from 2012-2014 annual report as research sample and regards the changes of enterprise turnover tax, the deduction effect of new fixed assets and deduction effect on outsourcing production cost as variables. By establishing the panel data model, this article analyzes the influence of these variables on corporate financial performance.The empirical results indicate that after the conversion from Business tax to VAT, the changes of enterprise turnover tax has negative correlation with corporate financial performance, and outsourcing production cost has the positive correlation with corporate financial performance, and new fixed assets has no correlation with corporate financial performance. After the conversion, both the decrease of turnover tax and increase of percentage about new fixed asset promote corporate financial performance. According to theoretical analysis and empirical results, based on tax system construction and enterprise response, the government should decrease VAT rate in transportation industry and build reasonable deduction system and the enterprises need to improve tax planning and enhance the financial management capability to cope with the changes about policy and market.