Policy 1: the abolition of tax exemption for imported equipment
Role: the abolition of tax exemption for imported equipment is conducive to independent innovation, equipment localization and the revitalization of China's equipment manufacturing industry.
Interpretation: conducive to the revitalization of the equipment manufacturing industry
The person in charge of the Ministry of Finance and the State Administration of Taxation said that the reform to abolish the imported equipment exempted from value-added tax policy, mainly refers to the "State Council on the adjustment of the tax policy on imported equipment," and the "Office of the State Council on foreign trade and foreign economic cooperation and trade and other departments on the current to further encourage foreign investment in the views of the notice of the VAT-exempt policy. . These policies were introduced against the background of the implementation of production-based VAT in China, mainly to encourage the relevant industries to expand the utilization of foreign investment and introduce advanced foreign technologies. However, some problems have been reflected in their implementation: firstly, the scope of imported tax-exempted equipments is wider, which is not conducive to independent innovation, localization of equipments and the revitalization of China's equipment manufacturing industry; secondly, the scope of tax exemption for imported equipments of domestic enterprises is smaller than that of foreign-funded enterprises, and the tax burden is not fair.
After the reform of value-added tax (VAT) transition, the enterprises can deduct the input tax on the purchase of equipments, no matter whether they are imported or domestically produced, and the original policy can be replaced by the new way, and the necessity of tax exemption for imported equipments no longer exists, and this policy should be discontinued.
The person in charge of the Ministry of Finance and the State Administration of Taxation pointed out that the VAT refund policy for foreign-invested enterprises purchasing domestically produced equipment was also introduced in the context of production-based VAT and VAT exemption for imported equipment. Since this part of the equipment is as much deductible after the transformation reform, the VAT refund policy for the procurement of domestically produced equipment by foreign-invested enterprises has been discontinued accordingly.
Policy 2: VAT rate on minerals restored to 17%
Role: The VAT rate on metallic and non-metallic mineral extraction products has been restored from 13% to 17%, which is conducive to a fair tax burden, standardization of the tax system, and the promotion of resource conservation and comprehensive utilization.
Interpretation: promote resource conservation
The person in charge of the Ministry of Finance and the State Administration of Taxation pointed out that, in 1994, when the tax reform, some mineral products are still practicing the planned price and planned allocation, and there are many historical legacy problems, and with the approval of the State Council, the VAT rate of metallic and non-metallic mineral extraction products was adjusted from 17% to 13% in May 1994 onwards. This policy has played a role in the stabilization and development of the extractive industry, but there are some problems.
One is the application of low tax rate on non-renewable mineral resources, which is not in line with the requirements of resource conservation and environmental protection; the second is the reduction of tax revenues in the resource extraction place, weakening the ability of the resource extraction place to provide public **** products; the third is that mineral resources are basically used as raw materials, and the value-added tax paid less by mining enterprises is made up for by the reduction of the input tax amount in the next link, and the effect of the policy is not obvious; and the fourth is that it It leads to the division of such goods with low tax rate and other goods, which increases the cost of collection and tax payment.
The person in charge of the Ministry of Finance and the State Administration of Taxation said that after the VAT transition reform, the outsourced equipment of mining enterprises will be included in the input tax credit, and the overall tax burden will be reduced, and in order to fair the tax burden, standardize the tax system, and promote the conservation and comprehensive utilization of resources, it is necessary to restore the VAT rate of the metallic and non-metallic mineral extraction products to 17 percent.
After raising the VAT rate of mineral products, the VAT contained in the final products will not be increased or decreased in total due to the corresponding increase of input tax deductible in the next link, only that the tax burden will be shifted to a certain extent between the upper and lower links, and the fiscal revenue will not be increased or decreased in total.
Policy 3: Tax rate for small-scale taxpayers reduced to 3%
Role: The uniform reduction of the VAT rate for small-scale taxpayers to 3% will provide a more favorable development environment for small and medium-sized enterprises.
Interpretation: Encourage the development of small and medium-sized enterprises
The person in charge of the Ministry of Finance and the State Administration of Taxation pointed out that the object of applying the transformational reform is the general VAT taxpayers, and the VAT burden of these taxpayers will be generally reduced after the reform, and the small-sized taxpayers (including the individual industrial and commercial households) with small scale and incomplete financial accounting will not be able to offset the input tax amount, as they are required to pay the VAT according to the sales amount and the levy rate, and they will be required to pay the VAT according to the sales amount. The VAT burden of small-scale taxpayers (including individual businessmen), who are small in scale and have unsound financial accounting, will not be reduced due to the transformation reform as they pay VAT according to sales and levy rate and do not deduct input tax.
The current policy stipulates that small-scale taxpayers are subject to a levy rate of 6% and 4% for industrial and commercial categories respectively. Therefore, in order to balance the level of tax burden between small-scale taxpayers and general taxpayers, and to promote the development of small and medium-sized enterprises and the expansion of employment, it is necessary to reduce the levy rate for small-scale taxpayers accordingly. Considering that it is very common for small-scale taxpayers to operate in mixed business in real economic activities, and it is difficult to clearly divide industrial and commercial small-scale taxpayers in the actual collection and management, it is no longer possible to distinguish between industrial and commercial small-scale taxpayers by setting up two levels of levy rates, and the levy rate for small-scale taxpayers will be uniformly lowered to 3%.
The person in charge of the Ministry of Finance and the State Administration of Taxation (SAT) said that the substantial reduction in the level of the levy rate for small-scale taxpayers will reduce the tax burden of small and medium-sized enterprises (SMEs) and provide them with a more favorable environment for development. In addition, the Ministry of Finance and the State Administration of Taxation will further encourage the development of small and medium-sized enterprises in taxation by raising the starting point of value-added tax and business tax and other policies.