The Study Of The Replacing Business Tax With Value Added Tax Effect On Banking's Earning Power

From May 1st,2016,China will implement business tax(BT)to value added tax(VAT)reform.It can be said that this tax reform is the most important one in China during recent years.Otherwise as banking playing a core role in modern economy,this tax reform which including banking will bring significant influence in economic and political.In this paper,I will pursue my study by following steps.Firstly,states the importance of the banking tax reform and reviews the related research.Secondly,defines some concepts which will be involved in the paper concisely and makes a brief summary of related theories.Thirdly,selects five large-sized commercial banks as a reference to explore the impact on the profitability of banking after the tax reform.Fourthly,take A bank as a case,based on financial data of nearly three years of tax calculated,then according to the change of the Du Pont Analysis on the profitability of the in-depth analysis,and the changes in profitability and tax reform through the Elastic Analysis combining the influence mechanism of tax system reform on profitability.Lastly,puts forward corresponding suggestions to the problems which A bank will face after the tax reform.Through this study we can draw the following conclusion: the implementation of the tax reform can eliminate double taxation and open up the tax chain.Moreover based on the specific A banks,because of the tax reform implementation time is short,many policy rules failed to perfectly carrying out.So the reform effect has not been satisfactory.But through the Elastic Analysis results to the A bank which providing a solution,that is,through the strengthening of tax cost management to reduce the tax burden will improve the profitability level.