Analysis Of The Impact Brought By Nationwide Implement Of Replacing Business Tax With Vat To Leasing Industry

According to the Cai Shui[2016]No.36,the reform program to replace the business tax with a value-added tax(VAT)was implemented nationwide on 1st,March.Taxpayers from construction,housing,financial industry,consumer services and other industries are demanded to pay VAT instead of business tax.VAT has brought an impact on finance leasing industry,especially on services about leaseback of tangible property whose lessees are unable to get profits from tax incentives.Cai Shui[2016]No.36 made a distinction between intangible property financing and tangible property financing,and stipulated different tax rates for each business.Leasing in narrow sense includes two basic business models,leaseback and direct leasing,which applied different tax rates after nationwide implementation of VAT.It seems that VAT reduced the output tax,and increased the profits.However,lessees who choose leaseback services of tangible property are unable to claim input tax credit,which increases the cost of financing relatively and may affect leasing industry negatively.Through Far East Horizon Chartering Co.,Ltd is not based on banks,it is the 1st listed financial leasing company in China and possesses a significant place in leasing market.Taking Far East Horizon Chartering Co.,Ltd.as research target,based on the knowledge and skills of MBA,this essay intends to study the impact brought by VAT on leasing industry and puts forward the development strategy of Far East Horizon Chartering Co.,Ltd.elaborates the development strategy of the company in response to the change of tax environment.