The Empirical Research Of The Impact On The Policy Of ‘replace Business Tax With Value-added Tax' To Project Cost

With the rise of national economic strength in recent years,‘deepen the reform of tax system and improve the system of council tax' has become the focus of current national work,and it is also a process of national economic strength that has been changed from quantitative change to qualitative change.As the mainstay industry of our country,the construction industry is also facing high risks and high pressure in the round of reform storm.The profit of construction industry has been diluted to the low point in the condition of economic recession,more and more stronger macro-control,state supervision of construction industry and the carrying out of replace business tax with value-added tax.The construction units must pay close attention to cost and increase the strength in cost control.The construction units has to change in the condition of slender profit and pay more attention to the policy of replacing the business tax with a value-added tax.by measuring and analyzing the impact of replacing business tax with value-added tax on direct cost and management cost,this paper summarizes the the way to optimize the process of the project management which would help the construction units improve the level of contract administration in project management and improve the economic benefit of project by reducing the risk and saving the construction cost.First of all,the traditional cost division method is not completely equivalent to the construction cost.The construction cost of construction enterprise can be divided into direct cost and management cost,the direct cost includes labor cost,the material cost and machinery cost,Management cost includes subcontract cost and supply cost.Secondly,under the ideal condition of "replacing the business tax with a value-added tax",draw the of the direct cost of construction enterprises will decrease by calculating the break-even points of labor cost,material cost and machinery cost.However,due to the non-standard construction market,the large labor contract has not yet been implemented in a large scale and the management of the building materials market is not in place that resulting in the pessimistic actual state of "replacing business tax with VAT".Get the conclusion of the direct cost of construction enterprises rises on the condition of excluding some cases where it is difficult to obtain VAT special invoice deduction,only for commercial concrete,steel,cement,doors,Windows and pipe piles,by calculating the actual tax burden of labor cost,material cost and machinery cost With the management experience of a teaching building and the general situation of the market.Finally,under the condition of "replacing the business tax with a value-added tax",both the subcontracting cost and the cost of party a have a great impact on the cost of construction enterprises.Since the VAT rate of the subcontracting cost is 10%,but the most subcontracted projects' VAT rate is 16%,construction enterprises sign self-supplying contracts with subcontractors in professional subcontracted projects whose tax rate is more than 10% by calculating,and more than 10% of the deductible input tax will stay in the construction enterprise in order to protect their own interests.Construction enterprises can choose "simple tax method" in the condition of self-supplying,by contrasting using the “general tax method” in the condition of non self-supplying and using the ”Simple tax method” in the condition of self-supplying which draw a conclusion of the tax of self-supplying is better when the cost of building materials supplied by party a exceeds 48.87% of the cost of building materials.This paper summarize the optimization of project cost management process and the countermeasures that construction enterprises could adopt by calculating and analyzes the impact of replacing business tax with value-added tax on direct cost and management cost as well as empirical analysis in order to help construction enterprises improve the contract management level in project management,reduce risk,save construction costs,improve the economic benefits of the project.