The Research On The Financial Impacts Of The VAT Transformation To China's Listed Companies

On 5th November 2009, the State Council passed a new《Provisional Regulations on Value-added Tax of People's Republic of China》, to implement a VAT transformation applying to all domestic regions and industries from January 1st, 2009. The old VAT policy played a very important role in the process of the economic development. However, with the rapid grow of the whole economy, the old VAT policy had shown its deficiencies. After the experimental implementations on North-east and central areas, the VAT reform was extended to the all other provinces. This new VAT reform is not only an optimization of the old VAT policy, but also a strategy as a cure of the financial crisis, implementation of expansionary tax policies and promotion of investment and domestic demand in the macro-control means.The new VAT policy not only brings about essential impacts to the macroeconomic environment, also improves the financial states of businesses. This reform has been applied for two years. It is a very worthy discussing topic to research on whether the new VAT policy is able to promote the domestic businesses, how big the influences to business'financial states are, and whether distinctions exist between different industries.This research will start with the theoretical impacts of this VAT reform. After that, the statistics from data of public corporations'financial changes during these two years will be discussed. An analysis about variable strengths of influences to different industries will be given as well. Finally, recommendations about the VAT reform will be provided.