Research On The Problem Of The Business Tax Replaced With VAT Of Listed Commercial Banks In China

After the reform and opening up, our tax system took place two large-scale adjustment and reform in 1984 and 1994. After the 1994 tax reform, for the convenience of imposition, we levied alone the business tax on the majority of labor projects, but with the economic development, the labor projects are increasingly integrated into the process of social reproduction, we levied the added-value tax just only on the processing and repair services, other service industries we still imposed the business tax. It retained a large number of double taxation factors and impeded seriously the development of modern service industry. In order to adapt the needs of economic and social development, China launched the first pilot work of changing the business tax to VAT in the modern transportation industry and parts of service industries in 2012 in Shanghai and gradually expanded to other industries across the country. Because the many formats and the complex business in China’s financial industry, the changing work is unprecedented difficulty. The Ministry of Finance and the State Administration of Taxation issued "The pilot program from Business tax to VAT" in 2011 and put forward the pilot idea that the Finance and insurance apply simplified VAT tax law in principle. But the pilot work of the financial industry didn’t implement. Until 24 of March in 2016, the Ministry of Finance and the State Administration of Taxation jointly released "the notification of expanding the pilot of changing the business tax to VAT", brought the financial industry, consumer services, construction and real estate into the pilot. In the entire financial sector, the banking sector has become the top priority of reform because of its absolute superiority on the volume, as well as others in close contact with entities industries. As a special industry, the implementation of tax reform can be described as a slight move in one part may affect the situation as a whole, once a greater degree of volatility occurs, the impact on economic and social consequences will be immeasurable. Therefore making actively preparations for the transition from the banking business tax to VAT to ensure the healthy development of commercial banks. It has important practical significance for the development of China’s banking industry and the development of the entire national economy. This paper discusses the country under the background of the deepening tax reform, and with parts of industries had changed to VAT, the necessity and feasibility of implement tax reform from business tax to VAT aiming at the China’s listed commercial banks. Then it introduced the advanced international experiences and practices of national banks of VAT and summed up some inspiration of imposing the VAT to China’s banking industry. In order to research the impact to the Chinese listed commercial banks and if the policy and the measures are in place and complete,this paper selects the 16 commercial banks in the Mainland of China listed in 2014 as samples, digitizes the result by measuring and calculating. Comparing and analyzing the indicators like profit,of the listed commercial banks before and after the changing of business tax to VAT. And analyzes the advantages and disadvantages of the approach in the pilot for the China’s banking industry. Finally, the paper makes a further research that aiming at the measures incomplete in the experimental unit and the measures for the Listed Commercial Banks about the changing from business tax to VAT and gives some practical recommendations.