Why is the state to implement the camping change?

Why is the country implementing the camping reform? How is the state to carry out the reform of the state? The following is the main content of the state why the implementation of the camp to increase the introduction brought by the consulting for reference.

First of all, let's analyze the advantages and disadvantages of the Camp Reform Increase:

Advantages:

1) Reduce the double taxation of business tax, and the tax burden for most of the enterprises will be reduced; 2) As the invoices can be deducted, the bargaining power of the enterprises will be increased; 3) Once the Camp Reform Increase is completed, the whole industry will form a chain of deductions.

Drawbacks:

Enterprises with no way to account for inputs, or those with labor as a cost, such as technology companies, will actually lose out.

1, what is the camp conversion? What is the process of conversion like?

Business tax to value-added tax, the full name is business tax to value-added tax, that is, the country intends to "Twelfth Five-Year Plan" period, the basic abolition of business tax tax, business tax in the scope of the original industry, all to value-added tax. We all know that the tax bureau is divided into two kinds: the national tax bureau and the local tax bureau, the national tax bureau mainly collects value-added tax and enterprise income tax, and the local tax bureau mainly collects business tax and individual income tax. Therefore, after the abolition of the business tax, the local tax bureaus may also be abolished, which is of course another topic. The original business tax industry, mainly including construction, real estate, finance, catering, transportation, etc., in short, "food, clothing, housing and transportation", while traditional industries such as manufacturing has been the scope of the value-added tax.

First, let's talk about the general background. The National Tax Bureau (NTB), which collects VAT, as its name implies, collects taxes for the country, which are given to the central government and then distributed to localities; and the Local Tax Bureau (LTRB), which, as its name implies, collects taxes for the localities, which are given to the localities and then distributed to the central government.

The BTR was piloted in 2012, first only in Beijing, Shanghai, Jiangsu and other places, and later extended to the whole country. The earliest to be included in the camp conversion were the transportation industry, tangible movable property leasing industry and modern service industry (such as software development, etc.), and then later included the postal industry, logistics industry and so on. By 2014, the only ones left that have not yet been included in the camp conversion are hardcore such as catering, real estate, finance and construction. And the camp conversion project is to be completed during the Twelfth Five-Year Plan period, which means that it will be completed in 2017. Originally we received news that it was going to be included on January 1, then it said July 1, and now it says the end of the year, but it's coming soon anyway.

2. What is the difference between business tax and VAT? What are the benefits of the change in business tax?

Turnover tax, is a tax based on turnover, the general tax rate is 5%. For example, if you have a turnover of 1 million, then you have to pay a tax of 50,000, the advantage is that it is very convenient and simple, and it is an individual who will calculate (so many business tax households do not even invite the accountant, and the legal person will report the tax himself). However, there is a problem with the sales tax, that is, in the circulation process to repeat the tax, because he only look at the full amount of business does not look at the value-added. Let's say, I spent 1 million to buy A product from someone else, this 1 million includes 950,000 turnover and 50,000 sales tax, if at this time I 1.2 million to sell A product, I have to pay another 60,000 according to the full turnover of 1.2 million tax (1.2 million * 5%). In other words, a product flow process more, to repeat the sales tax is more. If a product flows ten times before it reaches the consumer, the consumer is actually burdened with sales tax ten times.

Value-added tax (VAT), as you can see from the name, is a "value-added tax". For example, I bought 100 yuan B products, 1.2 million sold, the tax rate is 17%, I only need to pay 34,000 tax (1.2 million * 17% - 1 million * 17% = 34,000), much less than the sales tax. So a lot of tax whites do not understand, a look at the business tax rate is 5%, the VAT rate is 17%, I think the VAT to pay more, in fact, not, the VAT rate is high precisely because of the VAT payment is less, not to discuss the issue of the price of the price here. For most of the industries, the tax burden brought by VAT is much lower than business tax. What's more, 90% of enterprises are small-scale taxpayers, the VAT rate is only 3%, you can also be invoiced, compared with the business tax is really an advantage.

Without taking into account the set-aside, the general algorithm for VAT is "output tax - input tax". Output tax, that is, sales multiplied by the tax rate, such as the paragraph above, "1.2 million * 17% = 200,000 4"; input tax this concept is the key to this debate, the so-called input tax, is that "my business to buy in the product has been to the state to pay the tax! ", for example, the case of the above paragraph, product B in the sale to me when the state has paid "1 million * 17% = 170,000" of the tax, so I actually have to pay the tax, there is only "200,000 4-170,000 = 34,000 So the actual tax I have to pay is only "200,0004-170,000=30,0004". It should be noted that, as long as the input tax related to production and operation can be used to offset the output tax, offsetting the incomplete can also be left to later slowly offset. For example, I bought 1 million yuan of equipment today, the 1 million yuan of equipment formed 17 million input tax, but I only sold 500,000 products, at this time my input tax is 170,000, output tax is only 85,000, the tax payable is -85,000, of course, the state can not be subsidized by the money you pay at this time your tax is 0, the next time you re-sale of the time you can continue to deduct 85,000.

This is the first time that I've ever seen a product in the market, and I'm not sure if I've ever seen a product in the market. >That has to go back to the sales tax, I just said the sales tax would bring about double taxation, but why are there still a lot of industries that used to only have a sales tax?

The reason is simple: many industries cannot recognize inputs! If I am a manufacturer, I spend 1 million dollars to buy a set of equipment to produce the product, this 1 million dollars of equipment of 170,000 tax are my inputs, I am in the subsequent sales, this 170,000 tax I can use to deduct. But if I'm a software company, I'm relying mostly on those coders with high IQs, not on products like machines and equipment. I don't pay VAT when I hire the coders (personal tax is another matter), so I can't deduct it at all. In other words, if I spent $1 million to hire someone to design a software package for me, the $1 million cost would have to be borne entirely by me, and it's unlikely that I'd be able to deduct a $170,000 like I could for a set of machines. So during the first batch of camping change, the resistance force is the biggest is these rely on human labor rather than machine of the emerging industry. Of course the state is not too hard, advertising and other emerging industries, the VAT rate is 6%.

3. What are the benefits of the change? What are the disadvantages?

In addition to what I just said, in fact, pay VAT is more cost-effective for most businesses, the main benefits of the change of business tax to VAT also includes two aspects: 1, during the business tax period, no matter what you buy can not be deducted, for example, a restaurant to buy computers, tables and chairs can not be deducted, and now you can use the computers and chairs and tables of the VAT gold used to deduct it; 2, in the sale of the other party as Can also be deducted, so you can renegotiate the price with them, for example, you can say "buddy, look now you can deduct 170,000 input tax, you want to no longer give me the price a little higher, raise a 100,000 how?" 3, from the environment, the future sales tax will be canceled, the industry is the value-added tax, people can pay the value-added tax can be deducted on your payment of sales tax can not be deducted, more loss ah.

From the state's point of view, VAT can obviously realize better supervision than business tax, and can more effectively combat tax evasion.

But there are also limitations and drawbacks.

The biggest drawback, or inputs can not be accounted for, for example, construction companies from the farmers bought cement, etc., the farmers are unlikely to invoice him. And in China, can not be invoiced, the state does not recognize these cement to pay taxes (in fact, many farmers really never pay taxes), since they do not recognize the payment of taxes, but also impossible to recognize the buy in these raw materials generated by the input tax can be deducted. This has led to, originally, these enterprises only need to pay 3% tax, now become 11%, but in fact there is no deduction, the tax burden has increased substantially. So there are also experts who say that although the change is ostensibly to VAT, it may still be a simple levy at the original rate (VAT simple levy does not allow for input tax credits, but the tax rate is lower, exactly the same as business tax).

There are many other drawbacks, such as the transition between the two taxes is bound to be problematic if the change is now required to be in place within two years, and many large companies will have to redo their accounts from start to finish. There is also a deeper, central and local tax reform issues, the local can not eat will certainly have problems.

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