The Impact Of "Business Tax To VAT Pilot Reform" On Operating Management Of Construction Enterprise

In May 1,2016,the Chinese government has been carried out “The Business Tax to VAT Pilot Reform” in all industries,and the construction industry will be involved in the pilot program of VAT.As a construction enterprise is one of the most important participant in construction industry,“The Business Tax to VAT Pilot Reform” will have a great impact on the construction industry and change the former model of operating management and the mode of production.The characteristics of VAT,which is to avoid double taxation and ring deductible,will result in reducing the corporate tax burden.However,because the construction enterprise involves more complex materials,for example,“Some of the main materials and auxiliary material cannot get VAT invoices”,“The ownership of the equipment belongs to the individual ” and so on,a lot of input taxes can’t be deducted.Thus,the tax burden of construction enterprises increases.At present,it is in the transition period from business tax to VAT.For most of projects,the contract which signed before April 30,2016 and in the transition period had been performed in a simple way to calculate tax,which will reduce the tax burden on construction enterprises from 3% to 2.91%.However,according to the cycle of a project,this situation can continue for 2-3 years.After the transition period,construction enterprise have to choose in a normal way to calculate tax.“The Business Tax to VAT Pilot Reform ” is both an opportunity and a challenge for construction enterprises.Whether the construction enterprise can take advantage of this opportunity to achieve the purpose of improving efficiency and increasing profits through Carrying out their own reform which is to improve and standardize enterprise management,and developing the reasonable and feasible strategy,it is closely related to the survival of construction enterprises.In this research,by comparing and analyzing the changes of the cost system the contract management in the bidding stage,the changes of the professional subcontract management,the material management,the mechanical management in the process control stage of operating management after “The Business Tax to VAT Pilot Reform”.I have summarized and found five problems affecting construction enterprises which include “The Tax Burden and Interests of Enterprises”,“Tax Risks of Enterprises”,“Enterprise Management”,“Knowledge Level of Enterprise Staff” and “ProjectManagement of Enterprises”.To solve these practical problems enterprises face above,this research figured out the strategies to solve the problem through the way of brain storm,discussion round the round table,expert consultation.To test the feasibility of the strategies,the three strategies were implemented in real projects,including calculating the tax burden,comparing prices and carrying out sale-leaseback.The results of the verification show that the strategies to solve the problem are operable can achieve the purpose of anticipating in advance,improving the efficiency of operating management and reducing the tax burden.This research solves the real problem of construction enterprises and is beneficial to a construction enterprise management reform,improve the level and efficiency of operating management,reduce the construction enterprise tax burden.Not only that,This research which also provides reference and guidance for other construction enterprises,is helpful for operating management of other construction enterprises under the VAT policy.