As the largest tax category in China, value-added tax covers almost all aspects of economic activities in various industries and has a wide-ranging impact on the economy and society. Starting from January 1st this year, the Value Added Tax Law of the People's Republic of China officially came into effect. What changes have occurred in the tax rate structure and deduction chain in the past three months since the implementation of the fixed retention and refund tax law, the relaxation of input deduction scope, and the simplification of sales scope? Which industries can benefit? What are the impacts of changes in tax rate structure? When it comes to value-added tax, many people often first ask 'what is the tax rate' to ensure smooth policy coherence and more stable expectations for enterprise development. At present, the value-added tax law specifies three tax rates, namely 6%, 9%, and 13%, which have not changed compared to before. At the same time, it is stipulated that the applicable simplified tax calculation method shall be used to calculate and pay value-added tax at a rate of 3%. The coexistence of value-added tax rate and collection rate is a system design that balances tax fairness, management efficiency, and industrial support. It is mainly designed to adapt to the accounting capabilities of different taxpayers and moderately reduce compliance costs. For example, small-scale taxpayers generally suffer from a shortage of financial personnel and weak accounting capabilities. By adopting a collection rate and simplified tax calculation method, there is no need to account for inputs, which can significantly reduce the compliance costs of small and micro enterprises. The value-added tax law maintains the current framework and tax burden level of the value-added tax system, but has also made some adjustments to further improve the modern value-added tax system. In the value-added tax law, some recent reform achievements have also been consolidated in legal form. For example, the Value Added Tax Law for the first time explicitly defines value-added tax as an additional tax at the legal level, requiring a separate listing of the value-added tax amount on transaction vouchers, which helps to regulate market transaction behavior; It has been clarified that electronic invoices have the same legal effect as paper invoices, which is conducive to promoting "tax governance based on data" and adapting to the needs of economic structural transformation. The value-added tax law has made relevant policies more clear and unified, and our company's development expectations are also more stable. ”Jiang Ermei, the financial director of Chongqing Yuda Water Affairs Co., Ltd., gave an example that in the past, the transitional policy of value-added tax exemption was applicable to the acquisition of compensation payments. Now, it is legally clear that the compensation income obtained in accordance with the law belongs to the non taxable income of value-added tax. This means that the more than 71 million yuan of compensation payments for the relocation of the company's affiliated water plants can be calculated more clearly and separately, without the need for taxation. In accordance with the requirements of value-added tax law, the construction of the company's new water plant and asset reset will be more stable. How to achieve "ring deduction"? Further improving the value-added tax deduction chain and enhancing the certainty and operability of deduction rules are the core of the value-added tax system. By designing a systematic system and further improving the value-added tax deduction chain, it can effectively avoid duplicate taxation and promote fair market competition. Generally speaking, we subtract the input tax from the output tax and use the remaining balance as the taxable amount. When the balance is positive, we need to pay taxes. If it is negative, it becomes a deferred tax amount, which can be applied for as a deferred tax refund or carried forward to the next period for further deduction according to regulations. This deduction rule reflects the basic characteristics of value-added tax 'ring deduction'. ”Li Xuhong, Vice Dean of Beijing National Institute of Accounting, said. The Value Added Tax Law proposes that taxpayers are allowed to choose to carry forward the retained VAT amount for further deduction or apply for a refund in the next period, which is equivalent to legally clarifying the taxpayer's right to retain VAT for tax refund. This not only enhances the stability and authority of the system, but also provides a legal basis for supporting policies. ”Li Xuhong said. It is worth noting that there have also been significant changes in the deduction of input tax. For example, the input tax corresponding to the purchase of catering services, daily services for residents, and entertainment services has been changed from non deductible to non deductible for the purchase and direct use for consumption. In the past, when enterprises purchased catering, daily services for residents, and entertainment services, input tax could not be deducted. After this adjustment, travel agencies, as general taxpayers, arrange catering for customers as part of their business activities rather than direct consumption, and the corresponding input tax can be deducted. This is beneficial for the cultural and tourism industry as it can reduce the tax costs of our outsourced services. ”An official from Zhejiang Huzhou Yixing Travel Service Co., Ltd. said. The implementation regulations have also adjusted and improved the rules for offsetting input tax on mixed use long-term assets. The policy balances flexibility and standardization, encourages investment, and achieves tax equity through subsequent adjustments, which is conducive to enterprises planning long-term asset allocation more reasonably and supporting sustainable development. Sun Jing, the financial director of Jilin Siping Thermal Power Co., Ltd., said that allowing full deduction for the mixed use of single long-term assets with an original value of no more than 5 million yuan reduces operating and financial costs, helps accelerate equipment updates and technological upgrades, and enhances competitiveness; For the mixed use of single long-term assets with an original value exceeding 5 million yuan, the input tax cannot be deducted annually according to the years, making the value-added tax deduction chain more complete. Which industries can benefit? Adapting to new changes and providing clear legal compliance basis for various business operations with tax incentives is a key concern for many people. The value-added tax law stipulates some items that are exempt from value-added tax. For example, medical services provided by medical institutions; Old books, items sold by natural persons who have used them themselves; Imported instruments and equipment directly used for scientific research, scientific experiments, and teaching; Nurturing services provided by daycare centers, kindergartens, elderly care institutions, and disability service institutions, marriage introduction services, and funeral services; Academic education services provided by schools, services provided by students' work study programs, etc. The establishment of exemption from value-added tax is mainly aimed at encouraging the development of small and micro enterprises, small-scale taxpayers, and individual businesses, and reducing their tax burden. ”Shi Zhengwen, Director of the Finance and Taxation Law Research Center at China University of Political Science and Law, said. There have been changes to some of the past exemption items. For example, for-profit beauty medical institutions can no longer enjoy tax exemption for medical services. Many beauty salons are high-end consumers, not just general medical care. Increasing the tax burden on beauty salons appropriately is also necessary to regulate the economy and ensure fairness, "said Shi Zhengwen. Someone asked, 'I recently opened an online store, is there anything I need to pay attention to?' Relevant personnel from the policy department of the Wuxing District Taxation Bureau of the State Administration of Taxation in Huzhou City said that the value-added tax law has clarified and improved the definition of small-scale taxpayers, especially for special entities such as natural persons and non enterprise units, the rules for small-scale identity are clearer, avoiding the risks of misjudgment and forced registration. Specifically, according to legal regulations, small-scale taxpayers refer to taxpayers whose annual taxable sales amount does not exceed 5 million yuan. At the same time, it is clarified that "annual taxable value-added tax sales" refers to the cumulative taxable value-added tax sales of taxpayers within a continuous operating period of no more than 12 months or 4 quarters, and the sales of intangible assets and the transfer of real estate that taxpayers occasionally generate are not included in the calculation of annual taxable value-added tax sales. It should be noted that although the classification criteria for general taxpayers and small-scale taxpayers have not changed, there has been a change at a certain point. ”Li Xuhong explained that the relevant regulations stipulate that starting from 2026, if the annual taxable value-added tax sales exceed the prescribed standard, the effective date for general taxpayers shall be the first day of the current period exceeding the prescribed standard, but not earlier than January 1, 2026. That is to say, according to current regulations, taxpayers who adjust their previous sales revenue due to risk control checks, inspections, and supplements should be included in the corresponding period's sales revenue. When the cumulative sales revenue exceeds the prescribed standard, it should be retrospectively registered as a general taxpayer, but not earlier than January 1, 2026. (New Society)