Business tax, 5% of operating income, 25% of income tax profit and 7% of additional tax business tax, is too low in cost and high in profit.
Business tax pilot scheme: People's Republic of China (PRC) Ministry of Finance and State Taxation Administration of The People's Republic of China officially announced the pilot scheme of changing business tax into value-added tax on 201117.
According to the pilot scheme, the main tax arrangements for the reform pilot are as follows:
First, on the basis of the current standard VAT rate 17% and low VAT rate 13%, two low VAT rates 1 1% and 6% are added. The tax rate of 17% is applicable to tangible movable property rent, 1 1% is applicable to transportation and construction, and 6% is applicable to other modern service industries.
Second, transportation, construction, post and telecommunications, modern services, culture and sports, sales of real estate and transfer of intangible assets, in principle, the general tax method of value-added tax is applicable. In principle, the simple calculation method of value-added tax is applicable to finance, insurance and life service industry.
Third, the tax basis. In principle, the taxpayer's tax basis is all the income obtained from taxable transactions. For some industries with a large amount of funds collected, transferred or prepaid, the amount collected and prepaid can be reasonably deducted.