Value-added Tax Pilot Reform: Beijing and Other Locations

This newsflash has been provided by Texel Consulting/ThinkBridge CPAs. If you are interested in contacting them, please let the Chamber know by sending an email to rebecca@cancham.asia

Background
Value-added Tax (“VAT”) pilot reform was implemented in Shanghai from January 1, 2012.  Certain service sectors, especially transportation and certain modern service sectors, are now subject to VAT instead of Business Tax (“BT”).  Recently, many other provinces or cities are actively seeking to implement similar VAT pilot reform at their locations.  It is widely reported that Beijing will very likely implement VAT pilot reform from July 1, 2012, and such reform may cover certain sectors that are not in the Shanghai pilot reform scope, like construction.  In addition, according to certain officials, the state is considering expanding the VAT reform to the whole nation within the “12th five year” period.

Recent Development
Recently, it is widely reported that further to the VAT pilot reform in Shanghai, Beijing has been approved to implement the VAT pilot reform from July 1, 2012.  Currently, Beijing Local Tax Bureau is surveying more than 50,000 enterprises that are BT tax payers.
According to the reports, due to the difference of industrial segments and tax authority organization, the VAT pilot reform in Beijing may be different from that in Shanghai.  For example, transportation sector is less developed in Beijing than in Shanghai, and Beijing might include construction and general consulting sectors into its VAT reform scope.
Currently, the VAT pilot reform in Shanghai has already started to show its attracting force for certain sectors.  Some enterprise headquarters and some companies in certain service sectors have already been moved, or are considering moving to Shanghai.  In other words, regional tax preferences may attract investment to concentrate to the relevant regions (Shanghai), which is effectively disadvantageous for the development of similar industry enterprises at other locations.  Such trend will necessarily lead to the loss of enterprises and tax revenue of other locations, particularly the nearby regions like Jiangsu, Zhejiang, and other first-tier cities like Beijing, Guangzhou, Shenzhen.  Therefore, such regions are actively making the assessment and exploring to implement the VAT reform in their locations.  We understand that currently, Jiangsu, Zhejiang, Anhui, Tianjin, Shenzhen and Chongqing are making the relevant applications.
An obvious difference is that the state tax bureau and local tax bureau in Shanghai are actually one team.  However, in other provinces and cities, they are separate.  In addition, BT is a local tax, while VAT revenue is shared by the state and local governments.  For the VAT reform in Shanghai, to minimize the impact on local government’s income, it is decided that the VAT revenue from the enterprises that originally paid BT will still belong to the local government.  For the other provinces and cities that are exploring the VAT reform, such issues should also be properly addressed.

Potential Impact on Your Company
If your company is now requiring your suppliers or customers to adjust prices, based on the positive or negative impact of the Shanghai VAT pilot reform on your company, or your supplier/customers, then you will need to consider that such impact may be comparatively weakened if other locations like Beijing will implement similar VAT reform.  For example, assuming your company is a consulting company in Shanghai, it now has the competitive advantage than similar companies in other cities that your company can issue VAT invoices to your customers.  If your customers are VAT general tax payers, they will be able to credit input VAT accordingly.  But if Beijing starts to implement similar VAT reform, then similar consulting companies in Beijing will also have such advantage.
If your company is located in the provinces/cities that may implement the VAT reform soon (like Beijing), then it needs to assess the possible impact of the VAT reform on your company, or its suppliers/customers.  In regard, reference may be made to the impact of the VAT reform on the relevant Shanghai companies and their handling approaches.  For example, a consulting company in Beijing will likely be able to issue VAT invoice from July 1, 2012.
If your company is determining or adjusting the business allocation or operation models of the group based on the Shanghai VAT reform, then it should also consider the possibility that other locations (like Beijing) will implement the VAT reform soon.  For example, if part of your group’s business is within the scope of the future VAT reform of Beijing, then your group’s such operations in the areas close to Beijing may be concentrated to Beijing.  In addition, assuming that the Beijing VAT reform will be implemented from July 1, 2012, Beijing will have the similar advantage as Shanghai of attracting headquarter companies (for China or the region).

背景
上海自2012年1月1日起实行增值税试点改革,将部分原缴纳营业税的行业(主要是交通运输业和部分现代服务业)改为增值税的征收范围。最近,包括北京等其他一些省市也积极申请开始进行类似的“营该增”的改革。据多方报道,北京很可能于2012年7月1日起实行增值税改革,并可能涵盖建筑业等不在上海“营该增”范围内的行业。此外,据部分官员透露,国家可能考虑在“十二五”期间尽量将增值税改革推广至全国。

最新动向
近日,据多家媒体报道,继上海1月1日实施之后,北京试点“营改增”改革已于近日获批,并将于今年7月1日起正式实施,目前北京市地税局正在对全市5万多户营业税纳税人进行相关调研。
据报道,北京的试点“营改增”改革可能会考虑到北京的产业分布、税局结构等和上海的不同,从而突出“北京特色”。譬如北京的交通运输业不如上海发达,而北京可能会将建筑业和一般咨询业纳入“营改增”的范围。
目前,上海的“营改增”改革已开始显现促进产业集聚等效应,部分企业总部、现代服务业等的企业已经,或者考虑向上海集中。换言之,区域性优惠政策会产生洼地效应,造成资金流向该地区(上海),相当于变相排挤了外地服务业。而这样的趋势势必会造成其他相关地区的企业和税源的流失,特别是和上海邻近的江浙等省份,以及北京、广州、深圳等一线城市。所以,这些地区都比较积极地在进行有关调研,并争取尽早开展“营改增”改革。据了解,目前江苏、浙江、安徽、天津、深圳、重庆等地均在积极申请试点。
上海的一个特点是国、地税局是同一套班子,而其他省市的情况是国、地税局基本上都是分开的。同时,营业税是地税,而增值税是中央和地方共享税。在上海试点中,为尽量减少税改对地方财政的影响,规定原先缴纳营业税的企业,税改后缴纳的相应部分增值税也仍然归地方财政。对于上述目前在争取增值税试点改革的其他省市来说,也需要解决好这些问题。

对贵公司的潜在影响
如果贵公司目前基于上海“营该增”试点对于企业自身或供应商、客户的有利或不利影响而要求供应商或客户进行价格调整,那么现在应考虑到这种有利或不利影响可能会由于北京等省市也开展试点而削弱。譬如假定贵公司是上海的一家咨询公司,由于现在可以开出增值税专用发票,所以比起其他地区的同行业企业具有相对优势(因为如果客户是增值税一般纳税人,则可以抵扣进项增值税)。但如果北京也开始试点改革,那么届时北京的咨询公司也将具有这种相对优势。
如果贵公司是其他省市,特别是北京等很可能近期开始“营改增”试点地区的企业,则应开始评估“营改增”对企业自身,以及对供应商、客户的潜在影响。在这方面,可以参考上海试点改革的影响和上海相关企业的应对措施。譬如上述提到,北京的咨询公司可能从今年7月1日起可以开具增值税专用发票。
贵公司如果目前在根据上海的增值税试点改革的影响考虑对集团的区域布局和业务模式进行相关部署或调整,那么也应考虑北京等其他省市“营改增”的可能性。譬如,如果贵公司集团的一部分业务可能是在北京试点的行业范围内,那么目前贵集团内目前在北京附近的相关经营活动也许可以向北京集聚。又如,在选择中国乃至区域总部公司的位置时,假定北京将于今年7月1日开始“营改增”试点,那么北京将也具有目前上海吸引总部公司的类似优势。

我们能帮您:
基于我们在本期中国税务与商业法规速递中的讨论分析,泰悦咨询/诺德会计师事务所能在以下几方面帮助贵公司:
对于增值税试点改革对贵公司的影响进行分析并提供建议方案,包括对贵公司集团对于区域布局和业务模式的部署或调整提供财务、税务方面的咨询
审阅贵公司的业务模式、标准的合同条款和定价策略,并从增值税试点改革的角度提供建议
协助贵公司申请增值税一般纳税人资格及符合有关增值税申报和增值税发票等方面的规定
审阅贵公司的ERP系统、财务软件和其他相关的内控措施,并基于增值税试点改革的视角提供建议的改进方案
申请有关增值税(或营业税)的优惠

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