echemi logo
Product
  • Product
  • Supplier
  • Inquiry
    Home > Coatings News > Paints and Coatings Market > The effect of the VAT reform: more than just tax cuts

    The effect of the VAT reform: more than just tax cuts

    • Last Update: 2021-07-07
    • Source: Internet
    • Author: User
    Search more information of high quality chemicals, good prices and reliable suppliers, visit www.echemi.com

    "Global Coatings Network News"

    "Global Coatings Network News"

    "It not only opens the way for corporate tax cuts, but also blocks the back door for tax evasion.


    "It not only opens the way for corporate tax cuts, but also blocks the back door for tax evasion.



    Two months have passed since the implementation of the new value-added tax reform package in 2018.



    What kind of tax reduction effects will the new measures of the VAT reform bring? Since the full implementation of the VAT reform, how has the corporate tax burden changed? In addition to the tax burden, what new feelings have the two rounds of reforms brought to corporate business activities? With the continuous deepening of the value-added tax reform, what are the deeper and more specific reform demands of enterprises?



    In order to explore these issues, "Finance and Economics Weekly" recently conducted investigations on the effectiveness and unsolved issues of the VAT reform and VAT reform through enterprise visits, expert interviews, and online questionnaires.



    When it comes to a series of policies and measures for the reform of business tax and value-added tax reform, whether it is a business or a researcher, the tax cut effect is naturally the most concerned.



    Take the wholesale and retail industry closely related to consumers as an example.



    The logistics industry will also benefit significantly.



    The tax refund is another highlight of this new package of value-added tax reform.




    The tax cut effect brought about by the New Deal is not alone.
    According to the survey results of the "Finance and Economics Weekly", nearly 60% of the interviewed companies clearly stated that the May New Deal will bring about tax cuts for companies.
    Most of them said that the tax cuts they brought would be within 5%, and some were expected to cut tax rates of more than 10%.

    The tax cut effect brought about by the New Deal is not alone.
    According to the survey results of the "Finance and Economics Weekly", nearly 60% of the interviewed companies clearly stated that the May New Deal will bring about tax cuts for companies.
    Most of them said that the tax cuts they brought would be within 5%, and some were expected to cut tax rates of more than 10%.




    If the timeline is lengthened, from the comprehensive effect of the VAT reform in recent years, the effect of tax cuts is even more universal.

    If the timeline is lengthened, from the comprehensive effect of the VAT reform in recent years, the effect of tax cuts is even more universal.




    A relevant person from the Ministry of Finance told the reporter of the "Finance and Economics Weekly" that in the past five years, the cumulative tax cuts through the implementation of the VAT reform were 2.
    1 trillion yuan; the new value-added tax that was implemented in May is expected to bring annual tax cuts of 400 billion yuan.

    A relevant person from the Ministry of Finance told the reporter of the "Finance and Economics Weekly" that in the past five years, the cumulative tax cuts through the implementation of the VAT reform were 2.
    1 trillion yuan; the new value-added tax that was implemented in May is expected to bring annual tax cuts of 400 billion yuan.




    High-tech enterprises are the key households for tax reduction.
    Taking Ningbo Bull Electric Group as an example, from January 2017 to March 2018, companies enjoyed a total of 357 million yuan in tax relief, of which tax incentives for high-tech enterprises accounted for 215 million yuan, and an additional deduction of 107 million yuan for research and development expenses.

    High-tech enterprises are the key households for tax reduction.
    Taking Ningbo Bull Electric Group as an example, from January 2017 to March 2018, companies enjoyed a total of 357 million yuan in tax relief, of which tax incentives for high-tech enterprises accounted for 215 million yuan, and an additional deduction of 107 million yuan for research and development expenses.




    Beyond tax cuts

    Although tax cuts are the most noticeable aspect of the new package of VAT reforms and value-added tax reforms, the reforms have more in-depth goals.
    "Tax reduction is by no means the only goal.
    Opening up the deduction chain, optimizing the industrial structure, and enhancing tax neutrality are the original intentions of the VAT reform.
    " The above-mentioned relevant person from the Ministry of Finance told reporters.

    Although tax cuts are the most noticeable aspect of the new package of VAT reforms and value-added tax reforms, the reforms have more in-depth goals.
    "Tax reduction is by no means the only goal.
    Opening up the deduction chain, optimizing the industrial structure, and enhancing tax neutrality are the original intentions of the VAT reform.
    " The above-mentioned relevant person from the Ministry of Finance told reporters.




    In addition to changes in tax burdens, what are the more far-reaching practical impacts that the VAT reform has brought to enterprises?

    In addition to changes in tax burdens, what are the more far-reaching practical impacts that the VAT reform has brought to enterprises?




    The survey results of the above questionnaire show that the changes that companies have experienced since the VAT reform are ranked according to the degree of intensity.
    The top three are the simplified and convenient tax payment process, the general improvement of corporate tax standardization, and the opening of the industry chain deduction chain.

    The survey results of the above questionnaire show that the changes that companies have experienced since the VAT reform are ranked according to the degree of intensity.
    The top three are the simplified and convenient tax payment process, the general improvement of corporate tax standardization, and the opening of the industry chain deduction chain.




    "The effects of these three reforms are complementary to each other," Zhang Bin, a researcher at the Institute of Financial and Economic Strategy of the Chinese Academy of Social Sciences, told reporters.
    Up to now, the VAT reform is still using invoices to control tax, so transactions between upstream and downstream companies require upstream companies to issue special value-added tax invoices, so that downstream companies can obtain input tax deductions by invoices in future transactions.
    This chain of invoices greatly improves the initiative of enterprises to regulate tax payment.

    "The effects of these three reforms are complementary to each other," Zhang Bin, a researcher at the Institute of Financial and Economic Strategy of the Chinese Academy of Social Sciences, told reporters.
    Up to now, the VAT reform is still using invoices to control tax, so transactions between upstream and downstream companies require upstream companies to issue special value-added tax invoices, so that downstream companies can obtain input tax deductions by invoices in future transactions.
    This chain of invoices greatly improves the initiative of enterprises to regulate tax payment.




    With the deepening of streamlining administration and delegating powers and the full launch of the third phase of the Golden Tax, those enterprises that can normally obtain special value-added tax invoices have also increased their tax payment efficiency.

    With the deepening of streamlining administration and delegating powers and the full launch of the third phase of the Golden Tax, those enterprises that can normally obtain special value-added tax invoices have also increased their tax payment efficiency.




    According to Li Peng, tax director of Alibaba Group, on the one hand, the VAT reform has brought tax reduction red envelopes to enterprises by opening up the deduction chain, lowering and simplifying tax rates, and on the other hand, the VAT reform and the third phase of the golden tax have significantly increased The level of taxation administration, the gray space for tax payment that was common in the business tax era in the past has been greatly reduced.

    According to Li Peng, tax director of Alibaba Group, on the one hand, the VAT reform has brought tax reduction red envelopes to enterprises by opening up the deduction chain, lowering and simplifying tax rates, and on the other hand, the VAT reform and the third phase of the golden tax have significantly increased The level of taxation administration, the gray space for tax payment that was common in the business tax era in the past has been greatly reduced.




    "It not only opens the way for corporate tax reduction, but also blocks the back door for tax evasion.
    " Bai Jingming, vice president of the Chinese Academy of Fiscal Sciences, told reporters.

    "It not only opens the way for corporate tax reduction, but also blocks the back door for tax evasion.
    " Bai Jingming, vice president of the Chinese Academy of Fiscal Sciences, told reporters.




    The third-party evaluation report of the "VAT reform pilot reform" carried out by the Chinese Academy of Fiscal Sciences in 2017 shows that the VAT reform is also helpful in improving the business operation model.
    For example, the VAT reform may prompt large construction companies to internalize their original affiliates into the project management department of the construction company, adopting flat management, company direct management and other models, thereby strengthening project management and control.

    The third-party evaluation report of the "VAT reform pilot reform" carried out by the Chinese Academy of Fiscal Sciences in 2017 shows that the VAT reform is also helpful in improving the business operation model.
    For example, the VAT reform may prompt large construction companies to internalize their original affiliates into the project management department of the construction company, adopting flat management, company direct management and other models, thereby strengthening project management and control.




    The above-mentioned Ministry of Finance officials told reporters from the "National Weekly of Finance and Economics" that promoting the specialized division of labor in some enterprises and industries and changing the large and comprehensive industrial structure is also an important reform goal of the VAT reform.

    The above-mentioned Ministry of Finance officials told reporters from the "National Weekly of Finance and Economics" that promoting the specialized division of labor in some enterprises and industries and changing the large and comprehensive industrial structure is also an important reform goal of the VAT reform.




    Research by the Chinese Academy of Fiscal Sciences shows that some manufacturing companies’ cases highlight the effect of this reform.
    For example, the VAT reform included R&D technical services into the scope of value-added tax deduction.
    Some manufacturing companies that are themselves R&D laymen, saw that they could also enjoy deductions for R&D services obtained through procurement, and gradually removed R&D services from With the spin-off of the industry, R&D services have also obtained opportunities for professional development.

    Research by the Chinese Academy of Fiscal Sciences shows that some manufacturing companies’ cases highlight the effect of this reform.
    For example, the VAT reform included R&D technical services into the scope of value-added tax deduction.
    Some manufacturing companies that are themselves R&D laymen, saw that they could also enjoy deductions for R&D services obtained through procurement, and gradually removed R&D services from With the spin-off of the industry, R&D services have also obtained opportunities for professional development.




    Open up the whole chain

    After all, the VAT reform has only been fully implemented for two years, and the reform is still in progress.
    From the perspective of the enterprise, there is room for improvement in some aspects.

    After all, the VAT reform has only been fully implemented for two years, and the reform is still in progress.
    From the perspective of the enterprise, there is room for improvement in some aspects.




    The deduction chain has not been fully opened up is one of them.
    The results of the questionnaire show that the interviewed companies believe that there are still more prominent problems in the value-added tax field.
    The top five are that the tax rate still has room for downward adjustment, the difficulty in obtaining input tax invoices, the imbalance of tax burdens among industries, and the input tax credit Difficulty in deductions, insufficient deductions, and still many tax rates.
    Among them, more than 70% of the surveyed companies chose the two items: difficulty in deduction, insufficient deduction and difficulty in obtaining invoices.

    The deduction chain has not been fully opened up is one of them.
    The results of the questionnaire show that the interviewed companies believe that there are still more prominent problems in the value-added tax field.
    The top five are that the tax rate still has room for downward adjustment, the difficulty in obtaining input tax invoices, the imbalance of tax burdens among industries, and the input tax credit Difficulty in deductions, insufficient deductions, and still many tax rates.
    Among them, more than 70% of the surveyed companies chose the two items: difficulty in deduction, insufficient deduction and difficulty in obtaining invoices.




    “Difficulties in input tax invoices, as well as input tax deduction difficulties and insufficient deductions, are all concrete manifestations that the deduction chain has not yet been fully opened up.
    The failure of the chain has a consequence that is the uneven tax burden of the industry.
    ” Central Finance and Economics University professor Wang Yongjun said.

    “Difficulties in input tax invoices, as well as input tax deduction difficulties and insufficient deductions, are all concrete manifestations that the deduction chain has not yet been fully opened up.
    The failure of the chain has a consequence that is the uneven tax burden of the industry.
    ” Central Finance and Economics University professor Wang Yongjun said.




    It can be seen that opening up the deduction chain is not only a point where companies have a stronger feeling of reform since the VAT reform, but also a key demand for future reforms.
    So, what are the reasons that some companies still have breakpoints in the deduction chain?

    It can be seen that opening up the deduction chain is not only a point where companies have a stronger feeling of reform since the VAT reform, but also a key demand for future reforms.
    So, what are the reasons that some companies still have breakpoints in the deduction chain?




    The reporter's interview found that the reasons mainly include two levels.
    One is the specific policy design level.
    The current policy does not allow deductions or lacks deduction policies for certain aspects of the company’s expenditures; the other is the practical operation level.
    For some industries, Although the policy arrangement for input tax deduction is unimpeded, for various reasons, it is difficult for companies to obtain deduction invoices.

    The reporter's interview found that the reasons mainly include two levels.
    One is the specific policy design level.
    The current policy does not allow deductions or lacks deduction policies for certain aspects of the company’s expenditures; the other is the practical operation level.
    For some industries, Although the policy arrangement for input tax deduction is unimpeded, for various reasons, it is difficult for companies to obtain deduction invoices.




    From the perspective of specific policy design, the interest expense deduction is the most concerned by enterprises.
    Most business people interviewed by "Finance and Economics Weekly" expressed their desire to include interest expenditures as input tax deductions.

    From the perspective of specific policy design, the interest expense deduction is the most concerned by enterprises.
    Most business people interviewed by "Finance and Economics Weekly" expressed their desire to include interest expenditures as input tax deductions.




    According to the current policy, the "purchased loan service" and the directly related investment and financing consulting fees, handling fees, consulting fees and other fees are required to pay 6% value-added tax, but they cannot be used for input deduction.

    According to the current policy, the "purchased loan service" and the directly related investment and financing consulting fees, handling fees, consulting fees and other fees are required to pay 6% value-added tax, but they cannot be used for input deduction.




    A number of tax officials from companies such as financial investment, energy, biopharmaceuticals, etc.
    told reporters that for capital-intensive industries, the annual interest expense that companies pay to banks or related financial institutions is relatively high.
    If they cannot be deducted, it will undoubtedly increase the company.
    The turnover tax burden may also be one of the reasons why it is difficult for companies to reduce their financing costs.

    A number of tax officials from companies such as financial investment, energy, biopharmaceuticals, etc.
    told reporters that for capital-intensive industries, the annual interest expense that companies pay to banks or related financial institutions is relatively high.
    If they cannot be deducted, it will undoubtedly increase the company.
    The turnover tax burden may also be one of the reasons why it is difficult for companies to reduce their financing costs.




    "The operating characteristic of the biopharmaceutical industry is that it requires a large amount of capital exchanges.
    For example, the circulation and distribution sector occupies a large amount of capital, and our company is about 120 billion.
    There are also business with hospitals, and upstream and downstream businesses, especially between enterprises.
    A large amount of funds are required for the collection of funds.
    There will be a lot of interest expenses.
    " The deputy general manager of the financial management department of a biopharmaceutical company told reporters, "The impact of the non-deductible on pharmaceutical companies is very large, and it will also increase the pharmaceutical industry.
    cost.
    "

    "The operating characteristic of the biopharmaceutical industry is that it requires a large amount of capital exchanges.
    For example, the circulation and distribution sector occupies a large amount of capital, and our company is about 120 billion.
    There are also business with hospitals, and upstream and downstream businesses, especially between enterprises.
    A large amount of funds are required for the collection of funds.
    There will be a lot of interest expenses.
    " The deputy general manager of the financial management department of a biopharmaceutical company told reporters, "The impact of the non-deductible on pharmaceutical companies is very large, and it will also increase the pharmaceutical industry.
    cost.
    "




    The interest on fund borrowing from the fund pool of the group company and the interest generated by the transfer of funds between enterprises are included in the deduction chain, which is another major demand of enterprises.

    The interest on fund borrowing from the fund pool of the group company and the interest generated by the transfer of funds between enterprises are included in the deduction chain, which is another major demand of enterprises.




    The group company fund pool means that the group company aggregates the funds of its subordinate units in a fund pool, uniformly schedules the use of funds within the group, and pays interest to the subordinate units that transfer the funds, and at the same time collects interest from the subordinate units that use the funds.
    In recent years, with the rapid development of financial expansion services of some companies, this kind of fund lending among group companies has increased in scale and frequency.

    The group company fund pool means that the group company aggregates the funds of its subordinate units in a fund pool, uniformly schedules the use of funds within the group, and pays interest to the subordinate units that transfer the funds, and at the same time collects interest from the subordinate units that use the funds.
    In recent years, with the rapid development of financial expansion services of some companies, this kind of fund lending among group companies has increased in scale and frequency.




    Under the circumstance that simple fund borrowing cannot enjoy interest deductions, some financial innovations of some companies are also troubled.
    Gao Danqiong, Director of Taxation at JD Finance, told the "Finance State Weekly" that taking factoring asset securitization products (ABS) issued by factoring service providers as an example, on the one hand, according to the new regulations of the tax law on asset management plans, the ABS level needs to deal with the factoring A 3% value-added tax is calculated on the income; on the other hand, the factoring service between the factoring service provider and the customer financing from it has not been suspended, and the factoring service provider still needs to issue an invoice to the customer and pay a 6% Value-added tax, and input tax deductions cannot be obtained from the ABS level.
    Under the above circumstances, there is actually a double taxation problem.

    Under the circumstance that simple fund borrowing cannot enjoy interest deductions, some financial innovations of some companies are also troubled.
    Gao Danqiong, Director of Taxation at JD Finance, told the "Finance State Weekly" that taking factoring asset securitization products (ABS) issued by factoring service providers as an example, on the one hand, according to the new regulations of the tax law on asset management plans, the ABS level needs to deal with the factoring A 3% value-added tax is calculated on the income; on the other hand, the factoring service between the factoring service provider and the customer financing from it has not been suspended, and the factoring service provider still needs to issue an invoice to the customer and pay a 6% Value-added tax, and input tax deductions cannot be obtained from the ABS level.
    Under the above circumstances, there is actually a double taxation problem.




    A similar situation also exists in some technology companies.
    Jia Kang, chief economist of China New Supply Economics Research Institute, said that for example, some high-tech companies have to maintain their technological innovation teams with high salaries in the competition, but the high salary expenditures cannot obtain any input deductions.
    At a certain critical point, corporate tax burdens will rise instead of falling.
    In addition, in industries with high labor costs such as logistics, wages and salaries cannot be included in the deduction chain, resulting in increased tax burdens.

    A similar situation also exists in some technology companies.
    Jia Kang, chief economist of China New Supply Economics Research Institute, said that for example, some high-tech companies have to maintain their technological innovation teams with high salaries in the competition, but the high salary expenditures cannot obtain any input deductions.
    At a certain critical point, corporate tax burdens will rise instead of falling.
    In addition, in industries with high labor costs such as logistics, wages and salaries cannot be included in the deduction chain, resulting in increased tax burdens.




    Invoice dilemma

    The breakpoint of the input tax deduction chain at the practical level is stuck on the "invoice".

    The breakpoint of the input tax deduction chain at the practical level is stuck on the "invoice".




    Taking the freight industry as an example, Jia Kang said that in recent years, with the development of the Internet, the truck freight industry has formed many brokerage and service platforms with a "car-free carrier" model.
    However, relying on the freight business carried by these platforms, the invoice problem Difficult to solve.

    Taking the freight industry as an example, Jia Kang said that in recent years, with the development of the Internet, the truck freight industry has formed many brokerage and service platforms with a "car-free carrier" model.
    However, relying on the freight business carried by these platforms, the invoice problem Difficult to solve.




    In the past, the tax payment model of the freight industry was that the owner paid the tax on the ticket at the place of registration.
    However, under the Internet platform, the tens of millions of trucks that were scattered and randomly transported across the country made this model unfeasible.
    In order to get the invoice, "all kinds of invoicing companies and workarounds were forced out.
    " Jia Kang said.

    In the past, the tax payment model of the freight industry was that the owner paid the tax on the ticket at the place of registration.
    However, under the Internet platform, the tens of millions of trucks that were scattered and randomly transported across the country made this model unfeasible.
    In order to get the invoice, "all kinds of invoicing companies and workarounds were forced out.
    " Jia Kang said.




    The difficulty of getting tickets is not limited to the freight industry, and the construction industry is also a "prone area.
    " Because the upstream parties that construction companies deal with are often individuals or small-scale taxpayers, this makes it difficult for construction companies to obtain special value-added tax invoices.
    Even if they get the invoices, they are 3% tax rate invoices for small-scale taxpayers, which makes it difficult for companies to do so.
    Input tax deduction or insufficient deduction.

    The difficulty of getting tickets is not limited to the freight industry, and the construction industry is also a "prone area.
    " Because the upstream parties that construction companies deal with are often individuals or small-scale taxpayers, this makes it difficult for construction companies to obtain special value-added tax invoices.
    Even if they get the invoices, they are 3% tax rate invoices for small-scale taxpayers, which makes it difficult for companies to do so.
    Input tax deduction or insufficient deduction.




    In recent years, the finance and taxation departments have introduced targeted policies for the difficulty of obtaining input tax invoices for some companies.
    For example, the Ministry of Finance, the State Administration of Taxation, and the Ministry of Housing and Urban-Rural Development jointly issued the "Opinions on Further Doing a Good Job in the Pilot Program of the Construction Industry’s VAT Reform" in 2017, requiring the taxation department to actively create conditions for the establishment of special projects in the building materials market, large-scale project departments and other places.
    Invoice issuance points to facilitate the issuance of special invoices for sand, soil and stone sales companies, temporary operating companies, and building materials retail companies, and require timely handling of violations of building material sales companies’ refusal to issue invoices and increase invoices.

    In recent years, the finance and taxation departments have introduced targeted policies for the difficulty of obtaining input tax invoices for some companies.
    For example, the Ministry of Finance, the State Administration of Taxation, and the Ministry of Housing and Urban-Rural Development jointly issued the "Opinions on Further Doing a Good Job in the Pilot Program of the Construction Industry’s VAT Reform" in 2017, requiring the taxation department to actively create conditions for the establishment of special projects in the building materials market, large-scale project departments and other places.
    Invoice issuance points to facilitate the issuance of special invoices for sand, soil and stone sales companies, temporary operating companies, and building materials retail companies, and require timely handling of violations of building material sales companies’ refusal to issue invoices and increase invoices.




    "Although the policy is good, there are still difficulties in landing.
    " A construction engineering enterprise person told reporters, "Although the policy requires strict inspections of refusal to issue invoices, the characteristics of the engineering industry are due to tight client funds or long approval time.
    We can’t pay for the project in time.
    At this time, we have to rely on credit for purchasing raw materials.
    It is not easy to find such a supplier.
    How can we ask for invoices anymore?”

    "Although the policy is good, there are still difficulties in landing.
    " A construction engineering enterprise person told reporters, "Although the policy requires strict inspections of refusal to issue invoices, the characteristics of the engineering industry are due to tight client funds or long approval time.
    We can’t pay for the project in time.
    At this time, we have to rely on credit for purchasing raw materials.
    It is not easy to find such a supplier.
    How can we ask for invoices anymore?”




    Similar to the freight industry, the construction and engineering companies caught in the above-mentioned dilemma either bear all the tax costs themselves, or find other suppliers to do the accounting and invoicing through various channels, but they have to bear the risk of violations.

    Similar to the freight industry, the construction and engineering companies caught in the above-mentioned dilemma either bear all the tax costs themselves, or find other suppliers to do the accounting and invoicing through various channels, but they have to bear the risk of violations.




    Will the tax refund be extended?

    A number of companies interviewed by "Finance and Economics Weekly" showed a keen interest in whether the pilot program of tax deduction refunds can be further expanded.

    A number of companies interviewed by "Finance and Economics Weekly" showed a keen interest in whether the pilot program of tax deduction refunds can be further expanded.




    The so-called value-added tax deduction means that the enterprise’s VAT input tax is greater than the output tax for a period of time.
    If the extra input tax is too late to be transferred downstream through the output value, then there will be a so-called deduction.
    Taxes.

    The so-called value-added tax deduction means that the enterprise’s VAT input tax is greater than the output tax for a period of time.
    If the extra input tax is too late to be transferred downstream through the output value, then there will be a so-called deduction.
    Taxes.




    In April 2018, the "Comparative Study on Tax Burdens of Chinese and Foreign Enterprises" jointly issued by the China Enterprise Club and the Joint Institute of Finance and Economics estimated that the current value-added tax credit has a stock of trillions of yuan.
    The continuous accumulation of long-term and large amounts of retained tax credits means that the cost of capital occupation brought to the enterprise has been solidified.

    In April 2018, the "Comparative Study on Tax Burdens of Chinese and Foreign Enterprises" jointly issued by the China Enterprise Club and the Joint Institute of Finance and Economics estimated that the current value-added tax credit has a stock of trillions of yuan.
    The continuous accumulation of long-term and large amounts of retained tax credits means that the cost of capital occupation brought to the enterprise has been solidified.




    "In the normal operation of enterprises, the generation of tax credits is inevitable.
    If you want to reduce the capital cost and cash flow problems that the credits bring to the enterprise, the establishment of a tax rebate mechanism must be accelerated.
    " Zhang Bin said.

    "In the normal operation of enterprises, the generation of tax credits is inevitable.
    If you want to reduce the capital cost and cash flow problems that the credits bring to the enterprise, the establishment of a tax rebate mechanism must be accelerated.
    " Zhang Bin said.




    The reporter's survey found that companies' demands for tax refunds for retained tax credits are mainly concentrated in two types of industries, namely, industries with large initial investment and industries with input output tax inverted.

    The reporter's survey found that companies' demands for tax refunds for retained tax credits are mainly concentrated in two types of industries, namely, industries with large initial investment and industries with input output tax inverted.




    Take Hanergy Mobile Energy Holding Group as an example, "From upstream core technology research and development to high-end equipment manufacturing to midstream component production and downstream system integration solutions, we are a full industry chain model.
    Both upstream and midstream are asset-heavy industries.
    , The investment is large, the payback period is long, and the tax credits formed by equipment, R&D, and plant are quite large.
    " The head of Hanergy’s global tax planning department told the reporter of Caijing National Weekly.

    Take Hanergy Mobile Energy Holding Group as an example, "From upstream core technology research and development to high-end equipment manufacturing to midstream component production and downstream system integration solutions, we are a full industry chain model.
    Both upstream and midstream are asset-heavy industries.
    , The investment is large, the payback period is long, and the tax credits formed by equipment, R&D, and plant are quite large.
    " The head of Hanergy’s global tax planning department told the reporter of Caijing National Weekly.




    The industries where the input and output taxes are upside down are also key households looking forward to accelerating the reform of the tax refund.
    At present, my country's value-added tax rate still has many grades, such as 16% for manufacturing and sales of goods, 10% for construction, transportation and other industries, and 6% for modern service industries such as finance and logistics.
    Some people in the industry believe that after the May VAT New Deal, transportation companies will issue input invoices at a tax rate of 10% for transportation services, but logistics companies will issue output invoices at a tax rate of 6% for logistics auxiliary services delivered to customers.
    The inversion of the tax rate is also a way to lead to a tax refund.

    The industries where the input and output taxes are upside down are also key households looking forward to accelerating the reform of the tax refund.
    At present, my country's value-added tax rate still has many grades, such as 16% for manufacturing and sales of goods, 10% for construction, transportation and other industries, and 6% for modern service industries such as finance and logistics.
    Some people in the industry believe that after the May VAT New Deal, transportation companies will issue input invoices at a tax rate of 10% for transportation services, but logistics companies will issue output invoices at a tax rate of 6% for logistics auxiliary services delivered to customers.
    The inversion of the tax rate is also a way to lead to a tax refund.




    In addition, the uneven regional development will also cause some enterprises to face the problem of staying in.
    "The central and western regions are vast but complex, and the logistics infrastructure is relatively weak compared to the eastern regions.
    In addition, the population density in the western regions is small and the market development is not as good as those in the eastern developed regions.
    As a result, the tax burdens of companies engaged in the same logistics business in different regions will be uneven.
    , Companies in the western region are more likely to generate large amounts of value-added tax to stay in.
    " said Ji Xing, tax director of JD Logistics.

    In addition, the uneven regional development will also cause some enterprises to face the problem of staying in.
    "The central and western regions are vast but complex, and the logistics infrastructure is relatively weak compared to the eastern regions.
    In addition, the population density in the western regions is small and the market development is not as good as those in the eastern developed regions.
    As a result, the tax burdens of companies engaged in the same logistics business in different regions will be uneven.
    , Companies in the western region are more likely to generate large amounts of value-added tax to stay in.
    " said Ji Xing, tax director of JD Logistics.




    In addition, this trial of staying-off tax refund is a one-time refund of the input tax of equipment manufacturing and other industries.
    Many companies expressed the hope that a stable tax rebate mechanism can be formed in the future, to further implement tax reductions, and to provide companies with stable expectations.

    This article is an English version of an article which is originally in the Chinese language on echemi.com and is provided for information purposes only. This website makes no representation or warranty of any kind, either expressed or implied, as to the accuracy, completeness ownership or reliability of the article or any translations thereof. If you have any concerns or complaints relating to the article, please send an email, providing a detailed description of the concern or complaint, to service@echemi.com. A staff member will contact you within 5 working days. Once verified, infringing content will be removed immediately.

    Contact Us

    The source of this page with content of products and services is from Internet, which doesn't represent ECHEMI's opinion. If you have any queries, please write to service@echemi.com. It will be replied within 5 days.

    Moreover, if you find any instances of plagiarism from the page, please send email to service@echemi.com with relevant evidence.