Analysts said that overall, banks, beverages, communications and other industries, venture capital, small profit, energy saving and environmental protection and other special economic zones, Pudong New Area, the western region and other special regions will benefit from this reduction of 1340 billion yuan.
Jin Renqing of the Ministry of Finance yesterday stated in the new income tax statement that the new income tax embodies “four unificationsâ€: a unified corporate income tax law for domestic and foreign-funded enterprises; a unified and appropriately lowered corporate income tax rate; and a unified and standardized pre-tax deduction method. And standards; unified tax incentives, the implementation of "industry incentives, regional preferences, supplemented by" the new tax preferential system.
He introduced that the new tax rate was set at 25% from the nominal 33%. According to international data, this tax rate is at a moderately low level. The draft adopts five ways to integrate the existing tax incentives. The main contents of the tax concessions identified in the draft include: promotion of technological innovation and technological progress, encouragement of infrastructure construction, encouragement of agricultural development and environmental protection and energy conservation, support for safe production, promotion of public welfare undertakings and care for vulnerable groups, and special tax relief for natural disasters Policies, etc.
Jin Renqing pointed out in particular that due to the overall lowering of the statutory tax rate and the increase in the pre-tax deduction standard, if the new income tax is implemented in 2008, the fiscal reduction of about 93 billion yuan compared with the current tax law, including the reduction of domestic corporate income tax About 134 billion yuan, the income tax of foreign-funded enterprises increased by approximately 41 billion yuan. If we consider the implementation of transitional measures for the old companies that originally enjoyed statutory tax incentives, the fiscal reductions brought by the implementation of the new tax law in the year will be greater, but within the scope of financial sustainability.
Analysts said that overall, banks, beverages, communications and other industries, venture capital, small profit, energy saving and environmental protection and other special economic zones, Pudong New Area, the western region and other special regions will benefit from this reduction of 1340 billion yuan.
The beneficiary industry has the greatest benefit from bank drinks
Although the current domestic and foreign-funded enterprises' income tax rates are both 33%, the actual tax burden of many companies exceeds this level. These companies will undoubtedly become the big winners after this unification of taxes.
Cai Dagui, an analyst at Ping An Securities, said that the two tax mergers have different effects on different industries. As far as the industry is concerned, the actual tax burden of food and beverage, banking, communications operations, coal, steel, petrochemical, commercial trade, real estate and other industries are all significantly higher than 25%, so these two industries will benefit greatly after the merger of the two taxes.
Statistics show that as of the third quarter of last year, the taxation of the banking sector reached 35.59%, the beverage industry was 31.06%, and the telecommunications operation industry was 31.51%, ranking the top three in the domestic industry's tax burden.
“Especially listed companies in the banking and liquor industries do not only have a lot of tax incentives, but because wage costs and other expenses cannot be deducted before taxes, the actual tax burden is higher than the current 33% income tax rate, so these two industries The listed companies benefited the most," said Cai Dagui.
In addition, he believes that the actual tax burden of papermaking and other industries is close to 25%, and the industry as a whole does not benefit greatly. In addition, the preferential tax rate that some listed companies are already enjoying in the industry is much lower than 25%. Therefore, the opportunities mainly come from listed companies with an actual income tax rate of more than 25% in the industry. In industries such as electricity, non-ferrous metals smelting, transportation, medicine and biology, automobiles, household appliances, machinery and equipment, electronic components and other industries, since the actual income tax burden is less than 25%, the industry as a whole cannot enjoy the benefits of the merger of the two taxes. Only some listed companies with an actual income tax rate of more than 25% in the industry can benefit, such as expressway companies in the transportation industry and commercial vehicle leading companies in the automotive industry.
"Because the merger of the two taxes has the greatest impact on the liquor industry and the banking industry in beverages, we should pay close attention to banks and breweries from the perspective of the benefit of the merger of the two taxes."
“In general, the higher the original tax burden in any industry, the more benefits it will benefit from this tax reform.†Teng Tai, chief economist of Galaxy Securities, told the Morning Post reporter.
Preferential sector Small profit, high technology, venture capital
Among the five types of tax incentives mentioned by Mr. Jin Renqing yesterday, there are a number of special categories of enterprises that have received “special careâ€. They are small-scale low-profit enterprises, high-tech enterprises that need special support from the country, venture capital enterprises, and labor. Service companies, welfare companies, etc.
Jin Renqing stated that a 20% preferential tax rate should be applied to small and meager profit-making enterprises that meet the requirements, a preferential tax rate of 15% should be applied to high-tech enterprises that need priority support from the country, tax incentives for venture capital enterprises should be expanded, and enterprises should invest in environmental protection. , energy saving, safe production and other aspects of tax incentives. At the same time, preferential tax policies for agriculture, forestry, animal husbandry, fishery and infrastructure investment are retained. Alternative preferential policies shall be adopted for the direct tax reduction and exemption policies for labor service enterprises, welfare enterprises, and comprehensive utilization of resources.
“The reason why tax incentives are to be implemented for small-scale low-profit enterprises, high-tech enterprises, and shipbuilding investment companies is based on several considerations. First, the competitive environment of these three types of enterprises is at a disadvantage in the early stages, especially in the current capital market. With insufficient development and difficult financing difficulties, these three types of enterprises are very weak in terms of both capital and environment. Providing certain preferential tax revenues will help support the growth of these companies." Galaxy Securities Chief Economics Home Teng Tai said.
He told the Morning Post reporter that the competition of small meager profit-making enterprises is weak, so they are slightly supported; some of the high-tech enterprises are in line with national industrial support policies, and therefore need further concessions; as for venture capital companies, due to their high death rates, they have received support. Should be bigger. “In fact, most countries have great tax incentives for venture capital firms. If the country does not follow this international practice, then many venture capital firms are not willing to register in the country and have to invest overseas.â€
“Furthermore, the state’s practice of providing tax incentives for companies investing in environmental protection, energy saving, and water saving highlights a major change in the state’s tax policy: that is, the government no longer uses taxes as a means of fiscal revenue alone, but more The strategic policy has been injected into this. From this point of view, the coordination capabilities of the various ministries and commissions of the country are continuously improving."
Special Zone Special Economic Zone, Pudong New Area
In addition to the above-mentioned sections, Jin Renqing explained yesterday the transitional benefits enjoyed by the SAR. He said that the newly-established countries in the newly established countries that are legally established to develop foreign economic cooperation and technology exchanges in specific regions (ie special economic zones) and in the regions that have implemented special policies in the above-mentioned regions (ie, Shanghai Pudong New Area) need high-level support. Technical enterprises may enjoy transitional preferential treatment; and continue to implement preferential income tax policies for other encouraged enterprises that have been identified by the State (ie encouraged enterprises in the Western Development Zone).
Finally, the most significant change in the new tax law is the cancellation of the preferential tax reduction and exemption policy for productive foreign-funded enterprises, and the preferential taxation policy for half of foreign-funded enterprises whose products are mainly exported. According to the opinions put forward by the deputies to the National People's Congress, the draft increases the “income of enterprises engaged in environmental protection projects†and “income of enterprises that meet the conditions for technology transfer†can enjoy such contents as tax reduction and exemption, in order to reflect the state’s encouragement of environmental protection and technological progress. The policy spirit.
“The introduction of the national tax policy must not only consider the country’s strategic policy, but also consider the regional development plan. In addition, we must also consider the transition. If the preferential policies of the special zone disappear, then the inheritance of the policy cannot be reflected, and it may strike the SAR. The investment enthusiasm of domestic companies," Teng Tai said.
He finally told the Morning Post reporter that the new tax law will not pose a threat to foreign investment. “In the past, China’s preferential taxation to attract foreign investment was mainly due to the fact that the domestic investment environment was far less than it was at the time. At present, China’s social environment, infrastructure, and legal environment have greatly improved, and there is no need to sacrifice financial revenue. Affecting the competition of domestic-funded enterprises to attract foreign investment. Moreover, from the point of view of the total amount, the current inflow of foreign capital projects is too large, and it is not easy for the state to manage them."
Industrial Expressions and Real Estate
New income tax hedged land value-added tax
Morning Post reporter Liu Xiuhao
At present, almost all real estate companies implement an income tax rate of 33%. Only a small number of local companies in Shenzhen have a tax level of 15%. However, companies like Vanke, Gemdale, China Merchants, etc. are already national real estate companies. Their development projects are spread all over the country. Except for projects in Shenzhen, 33% of income tax is applied to projects across the country. Since real estate is not a state that encourages the development of industries, the low tax rate system in Shenzhen is unlikely to remain. Therefore, after the two taxes are combined, the income tax of real estate companies will be unified to 25%.
China Investment’s analysis report pointed out that the combination of two taxes brings about 12% improvement in real estate net profit.
In addition, according to tax incentives and transitional period policies, for real estate companies that have projects in Shenzhen, they will not only enjoy the excess profits from the decline in income tax in other parts of the country, but will also enjoy at least five years of tax benefits in Shenzhen. With the maturity of the Shenzhen market, unified taxation will not have too much profit impact on it after 5 years. But for the entire real estate company, land value-added tax is likely to be required to strictly liquidate. Great Wall Securities's analysis report points out that for development companies with gross profit margin exceeding 40%, the impact of land value-added tax on net profit will exceed 17.4%.
Therefore, for real estate companies, basically the impact between the two will offset each other, and the overall profit level will not fluctuate significantly.
Judging from the current actual taxation conditions, since the income tax of real estate companies is also pre-recruited according to the average industry profits, the income tax is not actually the most important part of the tax paid by real estate companies before the project company has carried out liquidation, and the tax rate is 11%. The actual impact of the downward adjustment is not as large as it seems.
Currently, for each sale of a commercial building in Shanghai, the tax included in the sales invoice is close to 12% of the price, including: 5.5% Business Tax + 15% × 33% Income Tax (pre-requisition) +1% LAT (pre-requisition) = 11.45%. After the income tax rate fell, the tax amount changed to 11.45%-15%(33%-25%)=10.25%, a difference of 1.2%.
Industrial Expressions and Banking
Guo Shuqing: CCB will pay 25% less income tax
Morning Post reporter Yu Jia
In fact, the current business tax system in the financial industry, due to the characteristics of one transaction and one taxation of business tax, makes the problem of repeated collections arising from circulation increasingly prominent. This has caused the banking industry to become the industry with the highest actual income tax rate.
Guo Shuqing, chairman of the China Construction Bank (0939.HK), said yesterday that if China’s domestic income tax and foreign-funded enterprise income tax were combined based on the calculation of income tax paid by CCB last year, the income tax paid by the bank would be reduced by 25%.
"The merger of two taxes will greatly reduce our tax burden and make us compete more fairly with foreign banks. Since our tax burden is too high, foreign banks have always been unfairly competing with us." Guo Shuqing attended the "two sessions" in Beijing. It also said that CCB will introduce an employee stock incentive plan before the end of this year, with a circulation of no more than 3% of the total issued share capital, and the initial circulation will be 0.4% of the total share capital.
Industrial Expressions·Automotive Industry
Increase profit by 8%, increase the speed of own brand cars
Morning Post reporter Luo Yu Intern Hou Jiajia
The income tax of domestic and foreign-funded enterprises is expected to merge. “We can finally stand on the same starting line with the joint-venture car companies.†Shang Yugui, Minister of Public Relations Department of Great Wall Motors, was uncomfortably thrilled during an interview with the Morning Post reporter yesterday.
“As a privately owned branded car company, we very much hope that we can have a fair and just competitive environment, so we are very concerned about the progress of this major policy. The company’s senior officials are still discussing how to put the money saved after the implementation of the new tax rate. To independent innovation R & D. "Shangyu Gui said.
In addition to Great Wall Motors, yesterday, the heads of several self-owned brand automobile companies, including Geely, BYD, and Tianjin FAW, all expressed their strong concern and support for the integration of the two taxes when interviewed by the Morning Post reporter. "This should be an opportunity for the development of China's own-brand car companies," said Dang Ren, assistant to general manager of Tianjin FAW Sales Co., Ltd., "The resolution of tax issues has finally seen some light."
Compared with self-owned brands, the situation of most multinational auto companies and joint venture auto companies may be less optimistic. The new tax rate adjustment not only increases their costs, but also allows them to keep their price advantage and their flexibility. Chinese domestic auto companies have greater cost space, and their own brands will challenge foreign brands more vigorously.
At present, the market share of China's self-owned brands in the domestic market has reached more than 50%. In the passenger car market with a relatively high technological content, self-owned brands also account for about 30%, because the self-owned brand companies often have lower costs and more. With flexible product improvement capabilities, the impact on joint venture auto companies is also increasing.
“Price is the killer of Chinese self-owned brand cars. Now the price of self-owned brand cars is generally only about 60% of the price of the joint venture models. After the new income tax adjustment, the income tax of domestic-funded enterprises is further reduced, and the income tax of foreign-funded enterprises is increased, one increase and decrease. The price advantage of the self-owned brand model may again increase. "This is really not good news for a joint venture company." "Jia Xinguang, chief analyst at the Beijing Automotive Industry Development Institute, told reporters.
However, for the joint venture, the current favorable news is: the merger of the two taxes, the old foreign company may have a 3-5 year transition period, in other words, the joint venture automobile companies can still use this transition period to make their own adjustments.
Experts in the industry pointed out that no matter what kind of state of mind companies are facing in tax reforms, there will be new changes for the domestic auto industry. Multinational auto giants, joint venture auto companies, and domestic autonomous auto companies are also facing new challenges. The environment, the test of new rules. Experts in the industry believe that once the tax policy has undergone major adjustments, it does not rule out the adjustment of long-term investment plans by multinational companies. However, Cao Jianhai, director of the Investment and Market Research Office of the Institute of Industrial Economics at the Chinese Academy of Social Sciences, believes that “if we apply a unified tax rate, it will be very beneficial to the development of domestically-funded auto companies, and those large multinational automobile groups that have entered China will not be This area has a tax rate of around 10%, while abandoning the lucrative returns they already have and will continue to receive in China. â€
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