The Research On Tax Risk Management Mechanism Of Transportation Under The Background Of Replacing Business Tax With VAT

Our country have been carrying out the tax reform of Replacing Business Taxwith VAT in the transportation industry and parts of Modern service industry inShanghai, Beijing and other cities since January1,2012. Until August1,2013, theReform has been transformed by the pilot to full country. According to the policydirection of the Ministry of Finance and State Administration of Taxation, our countrywill eventually achieve almost all of the original scope of Business Tax Replaced byVAT. Thus, Replacing Business Tax with VAT will be the most significant tax reformwithin the current and future period which taxpayers will face. The company’sfinancial staffs and tax staffs have been put forward higher requirements in financialand tax activities because of the reform. And corporate financial and tax planning,financial accounting, operational efficiency, basic specifications have been affected.The improper operation will increase the risk of corporate taxation, and impactenterprise management objectives. Therefore, the research on tax risk management isextremely necessary under the background of Replacing Business Tax with VAT.In this paper, the author take transportation tax risk management as the studysample, and select A airlines as a case, in order to provide reference on tax riskmanagement for A airlines and the similar companies. Through literature researchmethods, case studies and other discoveries, the author find that A airlines tax riskmanagement consciousness is weak, especially in the background of ReplacingBusiness Tax with VAT, tax risk management issue is outstanding. It is mainlyperformed in the sense of tax risk management, tax and risk management agency, taxrisk management mechanism. Analysing the companies’ profit-driven nature and ourcurrent corporate tax environment, we can find that the reform will bring enterpriseuncertainty on value management effects, specifically manifested in two aspects: therisk of using tax policy negatively and the risk of using tax policy positively under thebackground of Replacing Business Tax with VAT.For the specific situation of A business before and after the reform of ReplacingBusiness Tax with VAT, the paper put forward the following suggestions based onin-depth analysis. Firstly, putting the tax risk management to the level of corporategovernance, establishling risk management committee and setting the specialized taxadministration-Tax Department, improving the tax risk management organization’spersonnel structure and job responsibilities, to create a good environment of managingand controlling tax risk for A. Secondly, establishling a mechanism of risk managingand controlling according to the COSO framework for A in the background ofReplacing Business Tax with VAT, including the objective, communication andoversight of tax risk management, and the identification, assessment, control of tax risk, improving the ability of managing tax risk and creating more value for theenterprise. Thirdly, according to the effect of Replacing Business Tax with VAT on themanagement practices of A, establishing a series of an efficient and sensitive tax riskearly warning indicators, to remind A concern the tax risk in the background ofReplacing Business Tax with VAT, and to improve the ability of managing tax risk.