Research On The Pilot Reform Of Replacement Business Tax With Value-added Tax In Film-television Industry And The Tax Policy Optimization

In China’s current taxation system, the value-added tax and business tax are the two most important turnover tax, which are levied parallelly and complement each other, playing a vital role in tax revenue. The structure of the taxation system begins in 1994. Industrial production and commercial circulation mainly levy VAT, while considerable parts of the tertiary industry levy business tax. However, with the development of economy and tax collection capacity, particularly, the development of modern service industry, the drawbacks of parallel levied the business tax and VAT increasingly prominent. The biggest problem is double taxation. The two coexist turnover tax, breaks the unity of goods and services tax approach, and also hindered the specialization.China’s "Twelfth Five-Year Plan "clearly calls for "expanding the scope of VAT, reducing business tax accordingly". January 1,2012, Shanghai began as a pilot reform of replacing business tax with VAT In transportation and modern service industry, opened the big screen of replacing business tax with VAT. The same year in August, the reform pilot expanded in batches. From August 1,2013, the reform of replacement Business Tax with VAT implemented in the nationwide. The pilot reform, which is the second round tax reform after the VAT reform in 2009, is an important measure to implement structural tax cuts and support the development of service industry.The cultural industries permeates all aspects of the national economy, which makes a great significance in promoting the overall economic restructuring and the development of other industries. In 2011, according to the National Bureau of Statistics, China’s tertiary industry accounted for about 45% in GDP. From the view of added value, cultural industries accounted for 7% in the tertiary industry. Cultural industry is becoming a new economic growth point. As an important part of the cultural industry, film and television industry is the focus areas of cultural industry’s policy. Film and television industry includes the creation, distribution and exhibition of film and television products and the production system of products and services which surrounding film.Meanwhile, China’s cultural system is in transition. The important role of cultural industries in the national economy has not yet fully play, and its development faces a series of bottlenecks. As an important means of the national implementation of industrial policy and macroeconomic regulation and control, the tax policy should play a role in further promoting the development of cultural industries, in which the purpose of this study lies.The pilot of the reform of replacing business tax with VAT expanding to radio and television industry is an important tax reform. Tt’s impact on Chinese film industry is not only reflected in the increase or decrease in the tax burden, but also leading to organizational structure and development patterns’ change of film and television companies, and even adjusting the future development trend and specialization of the industry. With the getting through of the deductible chain within the industry, the reform of replacing business tax with VAT may leverage the deep change in film and television industry.As an important part of the culture industry, the development of film and television industry will play a significant role in boosting the development of other industries. Then, how the reform of replacing business tax with VAT affect the film and television companies. In the background of the reform of replacing business tax with VAT and with the characteristics of the film industry, this article summaries relevant policies and uses specific case to study the reform of replacing business tax with VAT’s impact on film and television industry, then proposes appropriate measures to resolve the existing problems.At present, the development trend of whole industry chain is clearly. Many strength producers have develop towards to downstream industries and build their own theaters. From taxation perspective, this paper analyses the reform of replacing business tax with VAT’s influence on the tax burden and income of enterprises in the film industry chain, and make relevant suggestions to make the film and television industry have a smooth transition in the reform of replacing business tax with VAT.The reform of replacing business tax with VAT makes sense in promoting specific industries’development and reducing double taxation, and is an important step to deepen fiscal and tax reform. From the view of experimental point, the effect of reducing taxation is obvious and the six goals of reform are basically realized. Through effective tax calculation, Huayi Brothers’turnover tax burden in 2013 fell 3.94% compared with 2012, initially making the reform’s desired effect. The reform of replacing business tax with VAT improves the tax environment of film industry and promote the development of film and television companies.Combined with a special film industry box office split system and upstream and downstream industry chain, we found a series of problems, which hindered the effect of tax reform to some extent. So, it needs to further refine the film industry’s reform policy, and improve the tax system’s supporting reform measures. This paper suggests that, with the opportunity of the reform of replacing business tax with VAT, we should fulfill the advantages of the new system environment, open up the tax impediments in the film industry chain, and achieve tax reform results.The reform of replacing business tax with VAT reduces the corporate tax burden firstly. In the deep meaning, it promotes the development of services industry and forces a new round of tax reform. As a local tax, the business tax is a major revenue sources of local governments, while the VAT is central and local share tax, the central government sharing 75%, the local government sharing 25%. The reform of replacing business tax with VAT may break existing distribution relationships of break existing distribution relationships. For local government, nurturing new local tax sources is urgent.