Analysis On The Impact Of "Replacing Business Tax With Value-added Tax" On The Tax Burden Of Realestate Turnover Tax

After the opening-up and reform,trying to meet the needs and requirements of the economy in the coming future,Chinese government has enacted many polices to reform domestic real estate industry in past years,the industry has been developing faster and helped China get over two the financial crisis in 1998 and 2008.Now real estate industry becomes one of most important industry in China.However,serious tax issues always slow down the rate of progress.In order to correct the tax issues,relieve real estate corporations' pressure,promote the industry and national economy development,government decided to implement valuedadded tax to replace business tax in real estate industry from 1st May 2016,that is,business tax completely retired from the stage of Chinese tax and value-added tax will be the first tax in the industry.Compared with Business Tax,VAT has advantages,for instance,it helps to solve repeated taxation and provides business with the opportunity to decrease tax.In other hand,tax rate increasing from 5% to 11% also may cause the heavier tax burden.Although the tax reform of real estate industry may face some challenges,the reform is truly important to the industry,as it can help to r companies to focus on own business and timely reform themselves to meet the needs of present time.Many researches believe value the reform and believe it will work in the industry,the real tax situation is still complex.The paper finds that the change of tax rate will not totally influence the final tax burden,however,VAT invoice management will significantly influence the burden.30% deductible costs can help companies to decrease the turnover tax.Additionally,some policies of land costs may cause companies facing potential crisis,even though it is truly helpful for decreasing turnover tax.Finally,through comparing the real data from nine real estate companies,is was found that the companies with different operating capacity and business structure will face the different results of turnover tax burden.Considering recent domestic economy keeps changing,the target of decreasing turnover tax of real estate industry may not be achieved in the coming future.The paper composed by the following parts.The first part mentions the meaning and purpose of researching the tax reform,summaries relevant journals,tax concepts,the industry history and explains why China needs the tax reform.The second part compares the different tax burden between business tax and value-added tax and analyzes the influence of turnover tax from several points,for example,tax rate,income,costs,the items of input value-added tax,land cost and increment tax of the value of land.Furthermore,some history data of real estate companies will be used to analyze turnover tax.The final parts will provide government and companies some potential suggestions and summarize the result of the whole analyzation.