How does the comprehensive promotion of replacing

How does the comprehensive promotion of "replacing business tax with value-added tax" affect the coating industry

how does the comprehensive promotion of "replacing business tax with value-added tax" affect the coating industry

May 5, 2016

[China paint information] from May 1, the pilot of replacing business tax with value-added tax (i.e. "replacing business tax with value-added tax") has been launched nationwide, and the four major industries of construction, real estate, finance and life services have also been included in the scope of replacing business tax with value-added tax. The pilot of "replacing business tax with value-added tax" covers a wide range and will undoubtedly have an impact on all aspects of people's lives. From the perspective of the whole industry, as a policy related to the reform, the replacement of business tax with value-added tax has a significant impact on the establishment of a long-term mechanism for real estate. As a coating industry closely related to the construction industry and the real estate industry, it is naturally also directly affected by the "replacing business tax with value-added tax" policy and indirectly affected by the real estate industry

how does the comprehensive promotion of "replacing business tax with value-added tax" affect the coating industry

then, how will the comprehensive promotion of the "replacing business tax with value-added tax" policy affect the coating industry? We might as well take a look at its weathervane - the real estate industry

in fact, there are different opinions on the impact of "replacing business tax with value-added tax" on real estate, and it is difficult to directly define whether it is a positive impact or a negative impact. However, Minister of housing and urban rural development Chen Zheng pointed out that in the long run, the replacement of business tax with value-added tax in the construction industry and the real estate industry is conducive to promoting the transformation and upgrading of the industry, promoting enterprises to improve their management level, standardizing market order, and accelerating the pace of de stocking the real estate industry

promote the de stocking of real estate to stimulate the demand for architectural coatings

for the pilot of replacing business tax with value-added tax, Premier Li Keqiang once said that in the process of replacing business tax with value-added tax, taxes and fees in all industries are only reduced but not increased. According to the new tax system, the tax rate of real estate leasing services, real estate sales and land use right transfer is changed from 5% business tax to 11% value-added tax, and real estate can be included in value-added tax deduction

it is understood that real estate development enterprises levy 11% value-added tax; For the sale of houses purchased by individuals for less than 2 years, a 5% VAT will be levied in full. The customers who buy these friction and wear testing machines are mainly domestic universities and large enterprises; The sales of houses purchased by individuals for more than 2 years are exempted from value-added tax. After the implementation of replacing business tax with value-added tax, the tax burden of the whole real estate industry is expected to be reduced from 396billion yuan to 334billion yuan, a decrease of nearly 15%. For home buyers, levying value-added tax can solve the problem of double taxation in housing sales and reduce the burden

the reduction of taxes and fees, to a certain extent, means the reduction of costs, which will stimulate enterprises to invest in the lithium-ion battery industry. The fierce competition will be conducive to the de stocking of commercial real estate and industrial real estate. As we all know, the relationship between paint and real estate is like the relationship between fish and water. With the increase of transaction volume in the real estate market, decoration becomes possible, and the paint market can also follow the "rising tide"

in recent years, with the slowdown of real estate development and investment, China's coating industry has also fallen into the new normal of low-speed growth. In 2015, although the central government successively issued a series of policies, such as reducing interest rates, reducing the proportion of down payment, and adjusting the provident fund policy, to speed up the pace of removing real estate inventory. But half a year later, the results seem not so ideal. By the end of February, China's commercial housing for sale area was 739.31 million square meters, an increase of 20.77 million square meters over the end of last year, indicating that China's real estate inventory increased instead of decreased, and the situation is still grim

with the full implementation of the "replacing business tax with value-added tax", it is undoubtedly good news for the real estate industry that taxes are only reduced but not increased. Because the reduction of tax burden will attract more people to put their eyes directly on real estate and stimulate consumers' desire to buy. Some research institutions believe that in the future, the demand of enterprises for office, retail and other commercial real estate may further shift from leasing to direct purchase, which will also help promote the further destocking of non residential real estate projects and promote the development of the architectural coating industry

impact on second-hand housing transactions neutral repainting market potential still needs to be tapped

after the "replacing business tax with value-added tax", whether the tax burden of personal second-hand housing has increased is the focus of many citizens. In recent days, many citizens from all provinces of the country have gone to the local tax offices of various districts to understand the situation, and ushered in a small peak of second-hand housing transactions in some regions

in this regard, some industry experts said that the recent rise in the trading volume and turnover of second-hand houses largely depends on consumers' digestion of rigid demand and improved demand, which is the normal performance of the traditional peak season in March and April, rather than the direct impact of "replacing business tax with value-added tax"

according to the provisions of the pilot transitional policy of levying value-added tax in lieu of business tax issued by the Ministry of Finance in March, individuals who will purchase houses for sale for less than two years will pay value-added tax in full at the rate of 5%; Individuals who will purchase houses for more than 2 years (including 2 years) for external sales will be exempted from value-added tax. This means that after the implementation of replacing business tax with value-added tax, the value-added tax, deed tax, personal income tax, surtax and other tax rates and relevant preferential policies for second-hand housing transactions have basically shifted the provisions of the previous business tax period, and will not have a significant impact on the second-hand property market prices

in the past two years, in the face of the first and second tier cities where the paint market is increasingly saturated, more and more enterprises have turned their attention to the two fields of recoating market and urbanization market. The repainting market mainly depends on the renovation of their own houses and the trading volume of the second-hand housing market. Judging from the current situation, the comprehensive promotion of "replacing business tax with value-added tax" can not be very active in the second-hand housing trading market, and paint enterprises can only find another way to tap the recoat market

everyone knows that the key and difficult point of de stocking is the third and fourth tier cities. Whether it is the elimination of restrictive policies, the relaxation of provident funds, house purchase subsidies, farmers' entry into cities and other measures, or the reduction of down payment, interest rates, deed tax reduction and other actions, it is difficult to promote the healthy development of the whole industry

the full implementation of the "replacing business tax with value-added tax" is to act as a "cost reduction" role in the "supply side structural reform", promote the flow of real estate and reduce inventory, which plays a positive role in boosting the confidence of the real estate industry in general, not only stimulating the release of demand in the buyer's market, but also making the seller's market full of expectations for the future trend. However, the reform of replacing business tax with value-added tax is not a short-term policy, and its significance for real estate will not be as immediate as the analgesic effect. However, as a long-term policy, it is laying a solid foundation for the establishment of a long-term mechanism for real estate