Influence of VAT Transformation on Enterprise Market Behavior

Transformation and reform of value-added tax in China and its influence

Wei Zhen 1 Peng Yanfang 2

(1. Wuhan Xu Hong Information Technology Co., Ltd.; 2. Wuhan Hong Xin Communication Technology Co., Ltd., Wuhan, Hubei 43000)

Since June 65438+1 October1in 2009, China has fully implemented the consumption-oriented value-added tax, which means that the production-oriented value-added tax will soon withdraw from the historical stage after 24 years, and the consumption-oriented value-added tax will dominate the tax center and will certainly play a greater role in the economy. This is of great practical significance for expanding domestic demand, reducing the tax burden of enterprise equipment investment, promoting enterprise technological progress, adjusting industrial structure and changing economic growth mode. At the same time, the transformation and reform of value-added tax will inevitably change the fixed assets accounting of related industries, thus affecting the financial situation and operating results of enterprises. This paper intends to analyze these problems.

Keywords: VAT transformation; affect

I. The concept of value-added tax

The so-called value-added tax refers to the difference between the output tax charged to consumers or users when producers and operators sell goods and the input tax paid when purchasing goods. 1993 When the tax system was reformed, China began to implement value-added tax, changing the original "in-price tax" into "out-of-price tax" and uniformly implementing the purchase tax deduction method. Input tax is deducted according to the tax amount indicated on the special VAT invoice. Taxpayers are divided into general taxpayers and small-scale taxpayers, and the tax rate is divided into two grades. On June 5, 2008, 165438+ the State Council held a party group meeting and decided to implement the reform of value-added tax nationwide. The meeting decided that from June 5438+1 October1day, 2009, the transformation and reform of value-added tax will be fully implemented in all regions and industries in China, and the scope of input tax deduction will be expanded.

According to the different tax deduction methods for enterprises to purchase fixed assets, value-added tax is divided into production value-added tax, income value-added tax and consumption value-added tax.

1. Production VAT

It means that the input tax included in the value of capital assets is not allowed to be deducted when collecting value-added tax. As far as the whole society is concerned, the tax basis of value-added tax includes both consumption data and production data, which is equivalent to the GDP of fixed assets and various consumer goods, that is, the scope of collection is consistent with the gross national product, so it is called production-oriented value-added tax. The statutory value-added tax of production is greater than the theoretical value-added tax, which has obvious double taxation factors for industries or enterprises with a large proportion of fixed assets in all assets, that is, industries or enterprises with high organic capital composition.

2. Income-based VAT

When collecting value-added tax, the input tax included in capital assets can only be deducted from the current depreciation, that is, the value of raw materials, auxiliary materials, fuels, power and other input intermediate products and the depreciated balance are tax appreciation. Its tax basis is equivalent to the sum of salary, rent, interest and profit. As far as the whole society is concerned, its tax basis is equivalent to national income, so it is called income-based value-added tax. Theoretically speaking, the theoretical meanings of income-based value-added tax and value-added tax are the same, but because the loss and transfer of capital assets are carried out in stages, the tax deduction certificate cannot be obtained in the process of value transfer, so it is not convenient to adopt the current invoice deduction tax law.

3. Consumption VAT

Refers to the collection of value-added tax, allowing all capital assets purchased during the tax period to be deducted at one time. That is to say, the balance after deducting the value of intermediate products put into production and the value of fixed assets purchased in the same period from sales income is regarded as the tax appreciation amount. As far as the whole society is concerned, its tax basis is equivalent to the value of all consumer goods, so it is called consumption-oriented value-added tax. The legal value-added amount of consumption-type value-added tax is less than the theoretical value-added amount in the current period of purchasing fixed assets.

Second, the main content of VAT reform

1. Implementation time and main application fields of VAT transformation

(1) The pilot of value-added tax transformation in Northeast China began in July 2004 1. The pilot northeast region mainly includes all counties and cities such as Heilongjiang Province, Jilin Province, Liaoning Province and Dalian City.

(2) The pilot of value-added tax transformation in central China started on July 2007 1. The 26 counties and cities in the central region mainly include: Taiyuan, Datong, Yangquan and Changzhi in Shanxi Province; Hefei, Maanshan, Bengbu, Wuhu and Huainan in Anhui Province; Nanchang, Pingxiang, Jingdezhen and Jiujiang in Jiangxi Province; Zhengzhou, Luoyang, Jiaozuo, Pingdingshan and Kaifeng in Henan Province; Wuhan, Huangshi, Xiangfan and Shiyan in Hubei Province, Changsha, Zhuzhou, Xiangtan and Hengyang in Hunan Province.

(3) The pilot of value-added tax transformation in eastern Inner Mongolia began on July 1 day, 2008. The pilot eastern Inner Mongolia mainly includes Hulunbeier, Xing 'an League, Tongliao, Chifeng and Xilin Gol League.

(4) The pilot of VAT transformation in the hardest hit areas of Wenchuan earthquake began on July 1 2008. The pilot areas severely affected by the Wenchuan earthquake mainly include 5 1 county (city, district) in Sichuan, Gansu and Shaanxi provinces, and have been identified as extremely hard-hit areas and hard-hit areas.

2. The main content of VAT transformation

(1) Since June 5438+ 10/day, 2009, under the premise of maintaining the current VAT rate unchanged, the general VAT taxpayers of all industries in China are allowed to increase the deduction of the input tax included in their newly purchased equipment in the current output tax, and the input tax that has not been deducted in the current period can be carried forward to the next period for further deduction.

(2) The input tax included in the new equipment purchased by the enterprise is the same as the tax paid for the purchase of raw materials, and the standard deduction method is adopted instead of the tax refund method implemented in the pilot area.

(3) Full deduction is adopted, and incremental deduction is no longer adopted in the pilot areas.

(4) In order to balance the tax burden of small-scale taxpayers and general taxpayers, the tax burden of small-scale taxpayers has been lowered while expanding the scope of input tax deduction of general taxpayers and reducing the burden of value-added tax on general taxpayers, and the rate of value-added tax collection has been lowered from 6% and 4% to 3% respectively.

(5) To cooperate with the full implementation of VAT reform, cancel the VAT exemption policy for imported equipment and the VAT refund policy for foreign-invested enterprises purchasing domestic equipment; Meanwhile, the value-added tax rate of mineral products will be restored to 17%.

Third, the impact of VAT transformation on enterprises.

1. Influence of VAT transformation on enterprise accounting

(1) The transformation of value-added tax can truly reflect the book value of fixed assets.

After the implementation of consumption-oriented value-added tax, the state allows enterprises to purchase fixed assets from the current output tax of enterprises. That is, the accounting treatment of purchasing fixed assets is to debit the account of "fixed assets", debit the account of "tax payable-value-added tax payable (input tax)" and credit the account of "bank deposit, etc.". Because the input tax can be deducted, the value-added tax paid by enterprises to the state will be reduced. At the same time, because the tax basis of enterprise urban construction tax and education surcharge includes value-added tax, the urban construction tax and education surcharge paid by enterprises will also be reduced. On the one hand, the tax burden is reduced, on the other hand, the book value of fixed assets is clearer.

In addition, after the transformation of value-added tax, the recorded value of fixed assets purchased by enterprises is its actual cost, excluding VAT input tax, which can truly and fairly reflect the book value of fixed assets.

(2) VAT transformation is more in line with the matching principle.

When the productive value-added tax is implemented, because the fixed assets can't deduct the input tax of value-added tax, the deduction chain is interrupted, and the deductible input tax in the current period is reduced accordingly. At the same time, the depreciation of fixed assets increases, and the cost included in the product cost increases. Under the condition of given product income, it does not conform to the principle of proportionality. After the transformation of value-added tax, the fixed assets of an enterprise, as the inventory accounting of the enterprise, are uniformly set up with the subject of "tax payable-value-added tax payable (input tax)" at the time of purchase, which is allowed to be deducted from the current output tax, which better reflects the principles of tax fairness and accounting comparability.

(3) The transformation of value-added tax reduces the value of assets and enhances the market competitiveness.

Different types of value-added tax have different effects on the balance sheet. In the production value-added tax, the purchase value-added tax cannot be deducted and can only be included in the original value of fixed assets, which leads to the increase of asset value. Because the value-added tax cannot be deducted, the value-added tax payable by enterprises has increased greatly. However, in the year when consumption-oriented value-added tax was levied, the input tax obtained by investing in fixed assets and adding new fixed assets was deducted in full at one time, and the value-added tax was significantly reduced. At the same time, the recorded value of fixed assets is relatively significantly reduced because it no longer includes the purchased value-added tax, which leads to the reduction of depreciation accrued by enterprises and promotes the profitability of enterprises. Therefore, the transformation of value-added tax is not only conducive to enhancing the market competitiveness of enterprises, but also can help enterprises maintain a stable financial structure.

2. The impact of VAT transformation on enterprise investment

Enterprise equipment investment and supporting investment will increase greatly, because the impact of input tax deduction on enterprise cash flow makes enterprise investment tend to be equipment investment that can bring input tax deduction. In addition, the transformation reduces the return requirement of equipment investment, and it is more likely that the enterprise's equipment investment plan will pass the feasibility analysis. Enterprise investment behavior will actively follow the national policy. The enterprise's expectation of the effect of the transformation policy will make the investment behavior of the enterprise as consistent as possible with the policy orientation. On the one hand, for the sake of tax neutrality, enterprises will think that transformation is good news and actively cooperate with the implementation of transformation to improve the competitive position brought about by tax fairness. On the other hand, enterprises will have an impact on the implementation path of transformation. In order to obtain and maintain the excess benefits brought by the transformation, enterprises have a strong motivation to take action, which may have a negative impact on the implementation of the transformation.

3. The impact of VAT transformation on enterprise market behavior

On the one hand, due to the reduction of corporate tax burden, it is equivalent to reducing the unit product cost of enterprises. With the increase of profit space of enterprises, enterprises will have more room for operation in market competition, for example, they can reduce the price level of products and expand market share, which is conducive to China's goods participating in international market competition. On the other hand, the transformation has stimulated the investment of enterprises, and enterprises can take this opportunity to develop new product categories and explore new markets. In this case, enterprises will use newer and higher quality products to seize the market, but not necessarily reduce the price of products. For the pilot, due to the regional nature of the pilot, there is a process of readjusting the equilibrium price. If it is assumed that in a perfectly competitive market, the production costs of enterprises inside and outside the region are the same, the enterprises in the region can reduce the product prices until the enterprises outside the region are squeezed out of the market. This price adjustment will be a long-term process. In an imperfect competitive market, especially in the case of regional market segmentation, the products of enterprises inside and outside the region may be sold at different prices, so there are multiple regional equilibrium prices in the whole market. This pilot transformation of VAT may also lead to the downward adjustment of the overall price level of related products, but this process is closely related to the implementation of the pilot policy. The more stable the pilot policy is and the longer it lasts, the better the action effect of the pilot enterprises will be, and they will face the risk of new policies issued by the state and the confrontational pressure of enterprises in other regions. The formation of the transformation path is the result of several kinds of power balance, and the pilot enterprises must consider this problem.

References:

[1] Zuo Zhanwei. Discussion on the transformation of value-added tax. Journal of Liaoning Economic Management Cadre College. 2008+0。

[2] Sun Haoxuan Sun Le: What is the significance of VAT reform. China securities journal .2009.02

[3] Gao Peiyong. In 2008, the new round of tax reform has entered the substantive operation stage. Financial Supervision. 2008 (5).