A Research On The Effect Of Value-added Tax Transformation To The Enterprise Investment In Fixed Assets

The transformation of value-added tax (VAT), as a transition from production VAT to consumption VAT, brings in great significance to value-added tax regulation and eliminating double taxation. Since 2004, China began to practice experimental reforming on VAT transformation, and national-wide reforming began in Jan 1st 2009.Through construction of theoretic model, as well as application of financial management instrument, this paper analyzes the mechanism of VAT transformation affecting enterprise fixed assets investment. Especially, in the perspective of tax-saving, this paper emphasizes on discussing the possible influence of transformation, during the policy transition time gap.This paper initially set the bases on the quarterly data of national-wide listed companies. Through using panel data model, performs the empirical test on the effect of the national wide VAT transformation to enterprise fixed assets investment. Then another test on the effect measurement during the policy transition time gap is performed, filling the blank of past research in this field, and also act as an objective description of VAT transformation.The finding is that during the policy transition time gap, the enterprise fixed assets investment does not increase as supposed, but instead impeded; on the other hand, the implement of policy increase such investment on a wide base. The VAT transition has limited effect on the non-VAT industry and 8 major industries in experimental area, as limited enhancement as to hi-tech industries such as bio-pharmaceutical and IT.Finally, this paper also gives reasonable suggestion to VAT transformation regulation, as well as to countermeasures of companies.