A Study On The Impact Of "VAT Reform" On The Financial Performance Of China’s Property Insurance Companies

With the implementation of the business tax reform to value-added tax(hereinafter referred to as the "VAT reform")in the construction,real estate,financial and living services industries on May 1,2016,the insurance industry has also been included in the scope of the "VAT reform" since then.During the period of business tax collection,due to the existence of double taxation,the tax burden of property insurance companies has been increased,and at the same time,the vat deduction chain of the property insurance industry and its upstream and downstream related industries has been artificially split,which is not conducive to the benign development of the property insurance industry,so the inclusion of the insurance industry in the category of "VAT reform" will help eliminate the drawbacks of double taxation,open up the VAT deduction chain,and promote the development of the industry.So far,the property insurance industry has been implementing the "VAT reform" policy for 6years,and exploring the impact of this policy on the financial performance of property insurance companies will help to understand whether the VAT reform policy has given full play to the role of tax reduction and burden reduction,and how well property insurance companies adapt to the policy can also help property insurance companies make good use of the policy and improve financial performance.This paper first analyzes the impact of the "VAT reform" policy on the financial performance of property insurance companies from the perspectives of income,cost and turnover tax burden,and believes that the implementation of this policy will reduce the turnover tax burden of property insurance companies,reduce the accounting amount of premium income,and at the same time,the deduction of input tax will help property insurance companies reduce costs.Subsequently,from the four aspects of profitability,operational ability,solvency and development ability,the indicators were selected to construct the financial performance evaluation system of property insurance companies.The 2011-2020 financial data of 22 property insurance companies were then selected for empirical analysis,and the common factors were extracted by the principal component analysis method,the comprehensive financial performance indicators were calculated,and the impact of the "VAT reform" on the financial performance of the property insurance companies was revealed through descriptive statistical analysis and multivariate regression analysis of panel data.The results show that:(1)The "VAT reform" policy has reduced the turnover tax burden of property insurance companies.(2)The turnover tax burden,the comprehensive cost ratio and the financial performance of the property insurance company are negatively correlated.(3)After the implementation of the "VAT reform" policy,the financial performance of property insurance companies has not improved significantly,which is related to the failure of property insurance companies to make full use of the deduction policy and the continuous impact of the comprehensive reform of automobile insurance.Finally,based on the analysis of theoretical and empirical results,this paper puts forward targeted suggestions such as property insurance companies should increase the tax deduction ratio,improve the tax management ability of enterprises,and change the marketing method.