The Impacts Of China Unicom’s Finance Performance From Business Tax Transfer To VAT

As an important industry, telecom is connected with economy and people’s live. On June 1, 2014, The VAT was levied on telecom industry. Because of this, the rate of circulation tax of telecom enterprises were promoted to a high level and the tax burden of these enterprises were heavier. The change of tax burden will give an influence on the performance of telecom enterprise. Profit is a target of any enterprise, so the performance’s change of telecom enterprise will put pressure on management behavior. On this background, the article study the change of performance of China Unicom in business transfer to VAT. From this point of view, we can analyze the impact of VAT on China Unicom and telecom industry.Firstly, this paper introduces the whole picture of the telecom industry, China Unicom and the background of business tax transfer to VAT. Secondly, the author compare the regulation differences between VAT and business tax on telecom, and then move to the impacts of finance report using the data, such as circulation tax burden, primary business income, synthesized finance index of China Unicom’s in the year of 2014. The research shows that tax burden of China Unicom raised ￥1.936 billion after business tax transfer to VAT. China Unicom cannot transfer the tax burden, therefore, the enterprise has to afford the burden by itself. Because of business tax transfer to VAT, the primary business income and profit reduces ￥9.381 billion. The author also calculates the complex finance index of China Unicom and reaches the same result. Finally, some suggestions are given to improve China Unicom’s finance performance.The creative point is the special view of finance performance. This study focuses on the impacts of the finance performance of a telecom enterprise after business tax transferring to VAT using the methods both financial analysis and comparative analysis.