Financial Research On The Conversion Of Business Tax To Value Added Tax(VAT) For Modern Service Industry

With the continuous development of China's market economy,our science-based taxation system is also undergoing a continuous improvement in order to catch up with the trend of economic globalization.In response to the problems arisen from the traditional taxation system,further building up a scientific taxation system,and promoting the adjustment of our economic structure,it is natural and reasonable for Business Tax to be converted to Value Added Tax(VAT).During this reform,one of the most important subjects is the Modern Service Industry.The Tax Reform promotes a more globalized taxation system;subsequently,it will lead a rapid development of the tertiary industry and enhance the competiveness of our service industryWith the full implementation of the Tax Reform,this thesis aims at researching and analyzing the significance and necessity for the subject.According to the questionnaire,it is revealed that there the reform has brought confusion to the in-house accountants.For instance,the management team focuses on how to reduce the tax burden of the company.On the other hand,the accountants focus on how to enhance tax planning,how to utilize tax incentives while abiding tax laws,how to calculate the tax payable correctly,how to improve bookkeeping and accounting process,how will the Tax Reform impact the financial statements and other financial indicators,etc.As a result,while understanding the significance & inevitability about the topic of Tax Reform,it is important to reveal the practical implication having been brought along.This thesis illustrates with Company A from the modern service industry and analyzes the influence imposed by the Reform.Assuming the full implementation of the Tax Reform in the year 2015,this case study re-calculates Company A's value added tax payable in the same year.While comparing the actual and hypothesized VAT payable,the taxation impact will be revealed from both theoretical and analytical point of view.This thesis will discuss the necessary actions to be undertaken by the modern service industry in response to the Tax Reform.It could offer a reference and promote instructive thinking for accountants in the modern service industry in terms of bookkeeping,financial management,and financial decision,after the full Tax Reform.