From May 1st to open the camp changed to increase the pilot, the implementation of double expansion: one is to expand the scope of the pilot industry. Two is to be included in the scope of deduction of real estate. Following the last round of the transformation of value-added tax reform will be enterprises to purchase machinery and equipment into the scope of deduction, the reform and will not move production included in the scope of deduction, regardless of the manufacturing industry, commerce, and so the original VAT taxpayer, or battalion changed to increase the taxpayers of the pilot project, can be deducted new real estate contained in the value-added tax. Expected to increase the size of the camp changed to increase tax cuts in 2016 will be more than 500 billion yuan.
Although the textile and garment industry itself is a value-added tax payment industry, does not belong to the scope of the camp changed, but the current round of changes in the real estate investment will be included in the comprehensive deduction items, with a clear effect on reducing the cost of investment. For real estate investment accounted for a large proportion of the textile and garment industry will significantly benefit from the current round of changes in the business to increase. We expect the effect of tax cuts will be mainly reflected in two aspects. First of all, the current new not dynamic property division two years 60%+40% input tax deduction, will directly reduce the company to pay the value-added tax, on the company's cash flow has certain effect. Secondly, real estate purchase take change the business tax to value added tax, company purchased real estate tax base will be from the original price reduction for the original / (1+11%) (the assumption here that the real estate tax income for 11% of the upper reaches of the real estate, construction), and thus can reduce the amount of depreciation, thickening of the net profit.
