Research On Influence Of The VAT Transition On Grid Enterprises And Future Development Of VAT

VAT (value-added tax) transformation is the transformation of VAT from production to consumption-type, also known as value-added tax reform. VAT at the current production tax system, the enterprise's fixed assets purchased included VAT tax, does not allow deducting tax; and if the implementation of consumption-type VAT, it means that this part of the tax can be deductible. In 1994 China carried out reform of the tax system, select the production-type VAT. The orientation of this policy is consistent with our economic situation and China's economic operation mode. The implementation of Production-type VAT played a positive role in increasing the country's fiscal revenue in the early stage, maintaining the normal operation of the national economy. However, with economic development, people gradually acknowledge that it is also curbing the investment and bringing other shortcomings, the implementation of consumption-type VAT could solve the problem of double taxation and to ensure a fair tax burden of different producers, consumption-type VAT has so many practical advantages that its implementation has become a necessity. Ministry of Finance and State Administration of Taxation issued the VAT reform on the national implementation of the Circular on Several Issues at the end of 2008, decided since January 1st,2009, the implementation of VAT reform in the country to achieve the production type to consumption type, finish the consumer VAT transformation.The enterprise benefits most from the transition of VAT, The impact to enterprise is multifaceted. Based on the previous studies, the article takes quantitative and qualitative point of views combined the theory and practice methods. The article first describes the origin of value added tax, the development process and the reality of China's VAT system. VAT produces in France, afterwards the various countries introduced gradually, our country execute the production-type VAT in the year of 1994. This year the production-type VAT has gradually incompatible with China's national conditions, thereby introducing the concept of transformation, and makes theoretical analysis of the value-added tax impact on the enterprise, mainly displays the influence on the enterprise taxes and fees and the profit, and the influence to the enterprise cash flows, investment and competitive power and so on. The article through the power grid's real data to study the value-added tax's affect on power companies, finally suggests some improvements to the current existence of certain problems, points out the future development of value-added tax.