What is the manufacturing VAT rate

A. What is the VAT burden rate for manufacturing industry

The general VAT burden rate is 1% of the total sales. For small-scale taxpayers, the tax burden rate is the collection rate: 4% for business, 6% for industry (now unified at 3%), and for general taxpayers, due to the input tax credit, the tax burden rate is not 17% or 13%, but much lower than the percentage, specific calculations:

Tax Burden Rate = Current VAT payable/ Current Taxable Sales Revenue

Current VAT payable = Current VAT payable for the current period = sales tax for the current period - actual deduction of input tax

Actual deduction of input tax = beginning of the period retained input tax + input tax for the current period - input transfers - export refunds - retained input tax at the end of the period

Generally speaking, the gross profit margins of the various industries tend to be assimilated, and remain within a fluctuating range, which also creates a VAT with an average tax burden rate of the industry, and the tax authorities are accustomed to the tax burden rate for the industry as a basis for assessing the business operation of the enterprise. The tax authorities used to take the tax burden rate of each industry as an indicator for assessing whether there is any abnormality in the operation of enterprises.

What is VAT

In reality, it is difficult to accurately calculate the added value or value-added of commodities in the process of production and distribution. Therefore, China also adopts the international common method of tax credit. That is, according to the sales of goods or services, the sales tax is calculated at the prescribed rate, and then the VAT paid when the goods or services are acquired is deducted, that is, the input tax, and the difference is the value-added part of the tax payable, which is a method of calculation reflecting the principle of calculating the tax according to the value-added factor.

VAT is a neutral tax based on value-added or price difference, which theoretically includes all areas of the agricultural industry (planting, forestry, and animal husbandry), mining, manufacturing, construction, transportation, and commercial services, etc., or on the basis of raw material purchases, manufacturing, wholesaling, retailing, and consumption of various segments.

Three, how to evaluate the reasonableness of the enterprise VAT rate

(a) analysis of the enterprise's value chain

The value chain of a manufacturing enterprise by including the research and development and design, purchasing, manufacturing, sales, transportation, after-sales service, and administrative human resources and other parts. For an independent enterprise, often internal encompasses all of the above value chain, the value-added generated by each part of the same company to pool, the corporate tax burden is relatively high. For a group of companies, the various parts of the internal value chain may be separate, and therefore the VAT burden on each enterprise is lower.

(ii) Analyze the production method of the enterprise

The processing costs of the enterprise include depreciation, labor, and auxiliary production costs, none of which have corresponding inputs that can be deducted. However, if the enterprise sends some of its products out for processing, and the other party issues special invoices, these processing costs produce inputs, and the enterprise's sales are the same, the value-added tax paid is reduced, and the tax burden is reduced. Enterprises in the process of high-speed growth, the choice of outward processing mode is very common, so when analyzing the tax burden rate, to analyze whether the enterprise has outward processing.

Nowadays, enterprises selling products are often delivered to the other side of the warehouse, transportation costs are relatively high. Transportation costs are handled in different ways, we compare the difference in tax burden between two common ways: one is borne by the buyer, the transportation company directly invoiced to the buyer; one is borne by the seller, the transportation company directly invoiced to the seller.

(D) analysis of the market positioning of the enterprise's products

Nowadays, the analysis of the tax burden is more emphasis on the same industry comparisons. In fact, the same industry is often different enterprises in the market positioning. Some enterprises to establish a brand image, take the high-end route, product quality, sales price is expensive. Some products attach importance to low-cost operation, pay attention to the mass market, the market capacity is large, win in the thin margins. Due to the different market position, the gross profit of the product is not the same, the profit is part of the value-added amount, the higher the profit, the higher the tax burden. Therefore, in the same industry, the tax burden of enterprises doing high-end products is relatively high, and the tax burden of enterprises doing low-end products is relatively low.