Study On The Effect Of Replacing Business Tax With Value-added Tax Of Hainan Airlines

In order to synchronize with the rapid growth of China's economic needs,to further perfect the tax system,the scope of ‘Business Tax Replaced with VAT' reform will expand to the whole industry from tax reform in 1994 to the ending of the reform in the year of 2016.In the period of refining the reform,the slowdown economic and of a diversified public consumption patterns and demand,it is vital to stimulate the sustainable development of the transportation industry and tertiary industry.It also has a key significance in promoting and maintaining sustained economic growth in China.As an important part of transportation industry,aviation transportation industry has developed rapidly in recent years.Theoretically,business tax replaced with VAT helps to avoid double taxation,and solve the problem of deduction links missing in air transportation industry,and so on.As a result,the reform can optimize the tax system,reduce tax burden of the corporate,and shorten the updating cycle of vehicle.All of that will be conducive to the development of air transportation industry.But due to we are in the early epoch of reform implementation,the policy effects of different airlines is not the same because of using policy improperly and that industry development is still at growth period.The paper,based on the analysis of the theoretical tax incidence ofHainan airlines,mainly using the method of case analysis and enterprise report data of 2013 and 2014,analyze the difference between theoretical tax incidence and practical tax incidence from the angle of the enterprise financing,investment,and operations(three major activities).The purpose of analysis is to find that,before and after the reform,whether or not theoretical tax incidence and practical tax incidence are reduced in the same degree.Finally,the paper found out the reasons and puts forward the corresponding tax advice.After the analysis the paper found that the actual tax burden of Hainan airlines are higher than theory tax burden in2013 and 2014,and the actual difference was greater in the year of 2013.The cause of this result is that the new VAT tax rate was set too high,the cost deductions were limited and update cycle of fixed assets was too long,etc.At last the paper proposed several tax planning advice in terms of the investment activities,financing activities and operating activities of the corporation.