Research On The Legal System Of Value Added Tax In Commercial Factoring Industry

In recent years,China’s commercial factoring business has developed rapidly.Commercial factoring has become one of the most effective means of financing for SMEs.However,there are still some problems and controversies in the application of value added tax(VAT)in commercial factoring in theory and practice.The study of the legal issues of commercial factoring VAT is conducive to ensuring the clarity and stability of the tax legal system of commercial factoring related industries and promoting the development of commercial factoring.The development process of the commercial factoring business is that the factor is detached from the actual goods,transformed into assessing the credit of the buyer(debtor)and providing financing to the seller(creditor).Therefore,the essence of commercial factoring is to provide financial services.There are many types of commercial factoring,but the common ones are recourse factoring and non-recourse factoring,public factoring and covert factoring,and refactoring.Among them,recourse factoring and non-recourse factoring are the most commonly used factoring categories in factoring transaction practice,and are also the focus of factoring contract legislation in various countries.The theoretical analysis of commercial factoring VAT is the basis for discovering problems in commercial factoring practice and proposing perfect methods.First of all,commercial factoring VAT must follow the principles of taxation by consent,the ability-to-pay principle of taxation,the principle of efficiency in taxation.First,the principle of tax requires that the constituent elements of taxation be statutory,the constituent elements of taxation be clear,and the taxation procedures be legal.Second,the ability-to-pay principle of taxation requires all taxpayers to pay taxes according to their substantial ability to pay.Although the ability-to-pay principle of taxation is most suitable in the field of direct taxation,it can still be applied in the field of indirect taxation.Third,the principle of efficiency in taxation includes tax administrative efficiency and tax economic efficiency.Secondly,the constituent elements of commercial factoring VAT are the basis for the VAT analysis of commercial factoring.First,analyze the constituent elements of taxation.The tax components follow the logical sequence from transaction qualification(transaction taxability)to tax quantification.Qualitative elements include tax objects,attribution relationships,and tax subjects,and quantitative elements include tax calculation basis and tax rate.Second,to analyze the constituent elements of VAT taxation of commercial factoring,it is necessary to distinguish between recourse factoring and non-recourse factoring.The financing principal and interest and related expenses obtained by the factoring in recourse factoring are taxable with VAT.In non-recourse factoring,the proceeds obtained from the assignment of accounts receivable claims by the factor to the refactoring are taxable.Whether recourse factoring or non-recourse factoring,the fees charged by the factor for providing other financial services to the receivables creditor are taxable in VAT.In practice,commercial factoring mainly has problems such as unclear characterization of VAT taxable acts,cascading taxation,and conflicts between commercial factoring business and three-stream consistency.First of all,there are great controversies in both theory and practice of commercial factoring VAT.Secondly,the most important cost of commercial factoring,financing costs cannot be deducted,and bank factoring has no related problems because banks can absorb deposits,resulting in an increase in the tax burden of commercial factoring.At the same time,the rupture of the commercial factoring tax chain has led to the heavier tax of commercial factoring than bank factoring,which violates the principles of tax efficiency and quantitative taxation.Finally,commercial factoring business conflicts with the relevant provisions of the relevant regulations,resulting in the risk that input tax cannot be deducted and will be deemed to be false VAT invoices by the tax authorities.In view of the problems existing in the practice of commercial factoring,the main improvement methods are: first,it is clarified that the taxable behavior of commercial factoring is taxable,and the financing principal and interest and related expenses obtained by the factor in recourse factoring are "loan services";In non-recourse factoring,the proceeds obtained from the transfer of accounts receivable claims by the factor to the refactoring are "transfer of financial instruments";The fees charged by the factor for providing other financial services to the receivables creditor are "direct financial services".Second,commercial factoring pays the difference tax on the basis of financial leases.Finally,the Draw on the purchasing(consignment)business to formulate exceptions.