Construction Companies, "Camp Changed By" Financial Impact

Due to lack of long-term considerations in the1990s tax reform, there are two taxes whichare VAT and business tax in our tax system for a long time. The problem of VAT chainruptured artificially and the double taxation has been criticized. Speeding up tax reformand broadening the tax base of VAT is the necessary measures to improve China’s socialistmarket economic system, and also an important part of China’s “Twelfth Five-Year Plan”.January12012,the work of experimental unit of” the VAT replacing the businesstax”(referred to as “business tax to VAT”) began in shanghai from the industries oftransportation and part of the modern service industry. To the February2014,pilot work hasbeen carried out26months from the shanghai pilot areas extended to the whole country，has also been expanded pilot industries, such as rail transport and postal services whichhad not been included in the reformed industries were included in the scope of the pilot.The work of pilot has achieved initial results and it supports a lot of experiences for thenext step work of “business tax to VAT”; October21,2012, the State Council held anconference on the expansion of “business tax to VAT”, which presented that “we shouldtimely add the construction and other industries into the scope of tax reform”; thus, thework of “business tax to VAT” of the construction industry were put on the agenda.The construction industry is the only industry in the secondary industry which is applicableto business tax; Its business activities related to machinery manufacturing, leasing industry,building materials industry, real estate and so on, and even affect the employment of ruralsurplus labor force; therefore, the construction industry plays an important role in thenational economy. the implementation of the “business tax to VAT” for constructionindustry will help to improve the construction industry tax system and promote its healthydevelopment.The implementation of “business tax to VAT” for the construction industry has become atrend. This paper, using the method of theory with practice and standing in the constructionenterprises point of view, analyze the impact of the tax reform to bring, such as accounting,tax management, financial reporting, tax burden, etc.; And how about the theory andpractical effect of “business tax to VAT” for construction industry; which responsemeasures should be taken for above effects and changes; these are the contents of thispaper to study.