The China manufacturing value-added tax(VAT)has been lowered to 13%.Is it reasonable for customers to ask for price reduction?
Now suppose your purchase cost is 100 yuan and the transaction price is 120 yuan. If you follow the 17% VAT rate, your input tax is 100*0.17=17 yuan, and the tax payment is 120*0.17=20.4 yuan. After the actual deduction, your tax amount is: 20.4-17=3.4 yuan. The actual profit is 120-100-3.4=16.6 yuan.
If you do not reduce the price to the customer, the value-added tax is 16%, then your input tax is 100*0.16=16 yuan, the output tax is 120*0.16=19.2 yuan, and your tax amount is 19.2-16=3.2 yuan. The actual profit is 120-100-3.2=16.8 yuan. This means that if you don't cut prices for your customers, the 0.2 yuan tax that you pay less will be yours.
If you reduce the price to 1% for the customer, the transaction price is 120* (1-1%) = 118.8 yuan. If you follow the 16% VAT rate, your input tax is 100*0.16=16 yuan, and the tax payment is 118.8*0.16=19 yuan. After the actual deduction, your tax amount is 19-16=3 yuan. The actual profit is 118.8-100-3 = 15.8 yuan. This earned 16.6-15.8=0.8 yuan less than the original price cut without tax cuts, and the profit decreased by 4.8%.
We'll find major problems when we take a closer look at the calculation, doesn't it mean a drop of 1%? How did the profit drop by 4.8%? What happened?
Attentive salespeople should be aware that if you reduce the price to your customers, if your supplier does not give you a price cut, then your profits will lose nearly 5%. Therefore, trading is risky and price reduction should be cautious.
Just yesterday (March 5) morning, at the Fifth Session of the 12th National People's Congress, Li Xiang made a government work report, which mentioned tax cuts, reducing the current 16% tax rate in industries such as manufacturing to 13%. The current 10% tax rate for the transportation industry, construction industry and other industries will be reduced to 9%, and the 6% first-class tax rate will remain unchanged.
This is a major benefit to the company. In the afternoon, I received a call from a customer asking how they responded to the price reduction request made by the customer after the introduction of this tax reduction policy. This reminds me of the troubles of many customers when the VAT was lowered by 1 percentage point last year.
The customer said that it is acceptable to drop one point. Now it is three points. The customer is a listed company. It is strong. Last year, it was forced to cut the price by one point. If the customer proposes to drop three points this year, the company's profits will be gone.
It seems that doing business and changing the environment will be a challenge. We put aside the amount of corporate competitiveness, only tax reduction, how the price of the enterprise is affected, to the enterprises that propose the price reduction requirements and the enterprises that respond to the price reduction requirements, analyze the impact of a falling price on the price.
First of all, the national tax reduction rate is not the same as the corresponding reduction in the sales price. The last time we saw the VAT drop by 1%, the price of the goods on the end market did not drop by one percentage point, right? Companies that ask suppliers to cut prices, first look at your own sales price, has it dropped?
Perhaps for the middle-link enterprises, their customers demand such price cuts, they are forced to drop, but this requirement is first transmitted from downstream customers. This is a result of competition and a process of profit distribution. This is not the result of the principle of value-added tax. Therefore, to do business, always think about what kind of competitive environment you are in, and to improve the core competitiveness of enterprises is the key.
Secondly, if all upstream and downstream enterprises are re-adjusting the price according to the national tax rate, or the policy is to reduce the value-added tax rate by 3%, the upstream supplier is required to cut the price by 3% because the government is not taxing the enterprise. With a levy rate of 3% (the levy rate and tax rate are not a concept), the value-added tax is essentially a tax on the value-added part of the enterprise, and the value-added rate of the enterprise will not be 100%.
Moreover, even if each enterprise transfers the government's reduced portion to the downstream enterprise, the VAT of one link is the tax reduction of the value-added part of this link, which is the part that can be transferred to the downstream. The ratio should be the product of the value-added rate of this link and the tax reduction rate. Formulated: tax-free price reduction = value-added rate * 3%, tax-included price reduction = value-added rate * 3 * / 1.16.
For example: the enterprise's input accounts for 60% of the revenue. If the enterprise's input 100% can obtain the VAT special invoice, regardless of the VAT rate, the sales item can be offset, then, for this enterprise It is only taxed at a rate of 40% of the value added. Then, the VAT is now 3% lower. For the company, it only reduces the VAT tax by 1.2%. This 1.2% is still relatively non-tax sales, not for tax-included sales. Relative to the tax-included sales income before tax reduction, only the tax burden was reduced by 1.0345%.
Therefore, from the perspective of pure tax reduction, the tax reduction of each enterprise depends on the value-added rate of the enterprise and the tax reduction transfer of upstream enterprises. In fact, upstream companies are not likely to cut prices by 3%. It is only reasonable to transfer the upstream tax cuts to the downstream. As we have analyzed, the tax rate is reduced by 3% and the enterprises are down by 1.2%. Therefore, the company that wants to reduce the upstream or downstream by 3% is not ignorant. However, there are many such mighty enterprises in China. In reality, many large groups and enterprises are very strong. They take the opportunity to demand that their suppliers (especially those with sufficient market competition) reduce the price by 3%, and the suppliers must survive in order to survive. Have to accept!
In general, the VAT reduction is only for the tax rate, which has nothing to do with the price of goods! ! !
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