Research On The Impacts And Countermeasures Of Business Tax Replaced With VAT On Real Estate Industry

With the further implementing of the policy of“Business tax to be replaced with the VAT”,China's real estate industry ushered in a new transformation in its development on May 1,2016.In the times before the“Business tax to be replaced with the VAT”policy issued,the real estate enterprises which were in the process of real estate development had to face various categories of taxes,especially the"Business Tax",this tax had been seemed as problematic due to its significant double taxing,this resulted in a significant burden for enterprises,also indirectly transferred the tax burden on to prices.From a long-term perspective,it was harmful for both real estate enterprises and a healthy development of the market,moreover,it did not conform to the proposed national measures of prices control stability and combating uneven distribution of wealth of society.For the real estate industry,tax reformation is imminent,and the related tax authorities need to solve the problems of both double taxing of business tax and heavy taxation burden of real estate.Because of particularity of real estate industry,theupstream suppliers in the real estate industry is basically considered as high-human cost focused,is a typical labor-intensive industries,more specifically,labor costs account for the proportion of the total cost is higher than other costs,thus leads to a less input tax deduction.Moreover,normally,the real estate enterprises obtain the land ownership primarily via auctions or the demolition,thus leads to the result of the largest input tax deduction of cannot be obtained in its development,moreover,the release of the“Business tax to be replaced with the VAT”policy can not help to successfully connect the upstream and downstream of real estate industry in a simple manner,thus“Business tax to be replaced with the VAT”system would exist as a"barrier lake"like.However,it can be said that the reform of“Business tax to be replaced with the VAT”is rather difficult for the real estate enterprises,furthermore,the tax reform has been pending until 1~stt of May,2016.Under this background,the study of the impacts on operation results,financial statement and cash flow of the real estate enterprise put by“Business tax to be replaced with the VAT”policy seems to be rather significant for practice,related managements and measurements.Besides,it is also important via offering the future study topics in regards to the fields of management reform,industrial division and transformation,and corporate tax reduction of real estate operation in the future.This paper adopts the methods of both literature research and case study,taking Zhe Jiang Greenland Real Estate as an example,combined with the comparison of the two tax systems of business tax and value-added tax,analyzes the influence of“Business tax to be replaced with the VAT”on the company's financial and management aspects,and proposes positive countermeasures.Generally,this paper is divided into five parts.The first part refers to the introduction,it expounds the research background and significance of this paper,and the research results of both domestic and overseas literature are summarized and reviewed in this chapter.Furthermore,this paper also conducts studies on the advantages of added-value tax,formation of“Business tax to be replaced with the VAT”and the problems of“Business tax to be replaced with the VAT”in real estate industry.In addition,the research concepts,frameworks,methods and research contents are presented sequentially.The second part primarily refers to the theoretical basis of this paper,definition of the real estate industry is presented,and introduce the importance of real estate industry in our country's economic status,moreover,analyze the institutional background of the“Business tax to be replaced with the VAT”policy in real estate industry,especially in the limitation aspect of tax system,thus to put forward the significance of“Business tax to be replaced with the VAT”to the real estate industry and the analysis of“Business tax to be replaced with the VAT”to the real estate tax burden,and the influence of the specific impact on the real estate enterprise financial and the impact on the real estate enterprise management.Third part refers to case analysis,it briefly introduces the basic information of Zhe Jiang Greenland Real Estate Group(ZGRG),especially four aspects of the tax burden level,operating results and financial position and cash flow which are in relation with taxes.This part analyzes the impacts on ZGRG'S finance which are induced by the“Business tax to be replaced with the VAT”,meanwhile investigates in the influence on its management,which including the four managements of added-value tax invoice,construction cost invoice,both management and sale fee of real estate,and the project management in political transforming period.The fourth part refers to the countermeasures of enterprises,this paper proposes the measures adopted by ZGRG, it confirms that the first thing should be focused on the development of tax planning,balance enterprise tax burden,then hold the“Business tax to be replaced with the VAT”training activities,build up the tax-saving culture for entire personnel,further strengthen the department cooperation and communication,adopting the related science and technology,strengthening management,dynamically control the enterprise tax burden,and invite the professional institution to teach to increase policy interpretation and steering,finally to explore the operating mode reform of the real estate companies,which are including exploring real estate company'development mode reform,explore the reform of real estate companies and construction companies'cooperation pattern,and to explore the mode reformation of both sales and operations of real estate company.Based on theoretical analysis and case data table analysis,this paper holds that the real estate industry's“Business tax to be replaced with the VAT”is conducive to improving the value-added tax system and promoting the industrial reform of the real estate industry.It will effectively improve the cost performance of real estate,and result in healthy competitions in real estate industry,and provides a further strengthened regulation of unreasonable profits.For real estate enterprises,they should actively make use of tax policies,make a good job in tax planning,and reduce the value-added tax burden of enterprises by optimizing the operation and management mode of development projects.Thus the financial indicators will also be further optimized,then contributing to the industrial differentiation and transformation of real estate enterprises.In the end,this paper also puts forward the deficiencies and prospects of the research on“Business tax to be replaced with the VAT”.Due to the particularity of the real estate industry,although the reform of“Business tax to be replaced with the VAT”has broken through most upstream and downstream links of real estate value-added tax,there are still some links,such as financing interest,that has not been broken through.However,the future remains to be further reformed in the tax system,and constantly improve the VAT system of the entire industry.