The Impact And Countermeasure Analysis Of VAT On Construction Enterprise

In order to meet the needs of social development,China has formally imposed VAT on the national scope since 1994,that is,our country has long been in the system of VAT mainly levying value-added tax on goods,mainly levying business tax on service and real estate,and collecting consumption tax on some goods mainly.This system played a very important role in the specific period of that time.However,with the continuous development of China’s economy,this transitional institutional design has gradually revealed some drawbacks.In order to improve the reform of the tax structure,to promote the development of modern service industry,reduce duplication of Taxation,promote the transformation and upgrading of the economy,and promote the optimization of industrial structure,In the outline of the 12 th Five-Year plan,China formally proposed that the business tax should be changed into VAT as an important part of the reform of the financial system.It is a major strategic decision made by the Central Committee of the party and the State Council under the new normal state of economic development in the Party Central Committee and the State Council as well as a major move for the reform of the tax system.According to the unified deployment of the Ministry of Finance and the State Administration of Taxation,the construction industry,the real estate industry,the financial industry and the living service industry have fully implemented the VAT replaces Sales reform in May 1,2016.Although both value-added tax and business tax belong to the transfer tax,the two are very different in the tax management.As the construction industry that applies the mode of business tax,it will be difficult to adapt to the sudden change of VAT.Although the purpose of the VAT replaces Sales is to reduce the tax burden of enterprises,however,there are some difficulties in the actual implementation process because of the existence of various practical problems,which may also lead to an increase in the tax burden of the enterprises and tax management difficulty.This paper clarifies related theories and defines relevant concepts,and selects SQ company as a case study to analyze the possible impact of tax reform on construction enterprises,and puts forward specific policy suggestions,so as to do some help tolet the enterprises adapt tothe VAT replaces Sales and help the tax department to improve policy system and follow-up management.