Encourage technological progress and equipment manufacturing value
From January 1, 2009, China will implement a nationwide VAT reform.
Experts said the value-added tax from production into consumer-oriented, technology-intensive to capital and infrastructure industries, companies with high organic composition of capital is beneficial. Equipment manufacturing industry and therefore benefit from the reform.
The largest tax cuts The VAT reform was recently enacted by the State Council executive meeting of ten to expand domestic demand fast yet steady economic growth in the ninth. Ministry of Finance, State Administration of Taxation said relevant, timely introduction of VAT reform, enterprise development for enhancing stamina, enhance the competitiveness of Chinese enterprises and anti-risk ability, to overcome the international financial crisis on the adverse impact of China's economy is very important role.
This is the history of our country the largest single tax reform, tax cuts one. It is estimated that the fiscal reform is expected to reduce the more than 120 billion yuan. According to estimates of some institutions, the reform is expected to drive growth in business spending next year, 110 billion ~ 150 billion yuan, equivalent to boost GDP growth by 0.4 to 0.5 percentage points. Scientific Research Institute of the Ministry of Finance tax
Dr. Hsu Wen said that China's tax revenue in recent years, rapid growth, the implementation of VAT revenue for the fiscal impact can already afford. Meanwhile, in the current economic situation, the State has the burden of expanding domestic demand and reduce the company requirements. Therefore, by means of the time, active fiscal policy launched a comprehensive transformation of value-added tax is a matter of course.
Equipment manufacturing industry and SMEs benefit
The VAT reform program elements are: to allow companies to offset the VAT contained in the newly acquired equipment, removal of import equipment exempt from VAT, abolition of foreign-funded enterprises purchasing domestic equipment, value-added tax rebates, will be small uniform VAT rate of the scale of the taxpayer to 3%, the minerals back to the 17% VAT rate. The biggest highlight of VAT reform program is full deduction, industry-wide restructuring, abolition of incremental restrictions, allowing enterprises to new machinery and equipment purchased input tax payment in full in the calculation of the amount of tax deduction.
"Allow companies to offset the purchase of equipment contained in the VAT, would eliminate the current system of production VAT double taxation resulting from factors to reduce the tax burden on business investment in equipment, while maintaining the current tax rates remain unchanged under the premise of is a major tax cuts. "relevant tax department official said that the measures to avoid double taxation on business equipment purchased will help to expand domestic demand and reduce the tax burden on business investment in equipment, and promoting technical progress, industrial structure adjustment and transformation of economic growth.
In addition, the level of small-scale taxpayers, the sharp decline in the rates, will reduce the tax burden for SMEs, for SMEs to provide a more favorable environment for development. It is understood that the Ministry of Finance and State Administration of Taxation will also be adopted to increase the value added tax, business tax threshold for tax and other policies to further encourage the development of SMEs.
Same time, as the reform of complementary measures, China will abolish the import of equipment exempt from value-added tax policy and foreign-funded enterprises purchasing domestic equipment, value-added tax rebate policy. This is mainly because of the transformation, the company purchased equipment, whether imported or domestically produced, the input tax deductions are available, the need for the original tax exemption no longer exists.
For metal ore and non-metallic Mining value-added tax rate from 13% to 17% recovery. The official said that after the VAT rate increase mineral products, because the next part of the input tax deductible increase, the final product contains the total amount of the VAT will not increase or decrease, but in the upper and lower taxes link between the transfer must occur.
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