How To Set Up Home Recycling Companies -- Tax Planning For Plastic Products Companies

The northern plastic products Co., Ltd. opened in July 2001. After 5 months of operation, the value added tax was 12%.

In general, the tax burden of value-added tax is only about 5%.

After in-depth analysis, the reason is that the raw material of the company, which is mainly purchased by itself, can not get the special invoices for value-added tax, and can not deduct the input tax. Therefore, the tax burden has always been high.

If the North Plastic Products Co., Ltd. purchased waste plastics from waste materials recycling companies, it can get a certain amount of input tax, thereby reducing the tax burden of value-added tax.

So, in January 2002, the decision making group of northern plastic products Co., Ltd. decided not to purchase raw materials by itself, so that 17% of the input tax amount could be deducted according to the value-added tax invoices issued by the material recovery unit.

However, after a period of time, the company found that as the recovery unit itself needed profit, the cost of raw materials was greatly increased while the tax burden was reduced, but the profits of the company did not increase.

How can we lower the tax burden and reduce the cost of raw materials?

According to the Circular of the State Administration of Taxation on the value added tax policy on the recycling of waste materials ([2001]78), if the northern plastic products Co., Ltd. invested in the establishment of an old Plastic Recycling Corporation, it can not only enjoy preferential tax exemption from value-added tax, but also the northern plastic products company can deduct the input tax according to the invoices issued by the recovery company.

In this way, the problems encountered by northern plastic products Co., Ltd. were solved.

After investigation and analysis, the increase of the cost (registration fee, management cost and so on) of the recovery company is not high. This part of the cost is basically a fixed cost, which is lower than the savings tax. Moreover, with the expansion of the production scale of the North plastic products company, the profits will be increased.

In April 2002, the company implemented the above plan and soon reversed the high tax burden.

Before and after the planning, the North China Plastic Products Co., Ltd., the data comparison is as follows: before the planning, 80% of the raw materials were purchased by the company, and 20% of the raw materials were purchased from the waste materials business units.

In the first 4 months of 2002, it purchased 400 tons of waste plastics, 2000 yuan per ton, totaling 800000 yuan, purchased 83.33 tons of waste plastics from the operating units, 2400 yuan per ton, totaling 199920 yuan, 33986.4 yuan permitted to deduct the tax, and other deductible input tax (water and electricity, repair parts, etc.) 40 thousand yuan; and the export income of plastic products sold was 1 million 500 thousand yuan.

The value added tax = output tax - input tax = 1500000 * 17% - (3, 3, 9, 8. 4 + 40 000) = 181013.6 (yuan), tax rate = 181013.6, 1500000 x 100% = 12.07%.

After planning for the next 4 months, the North Plastic Products Co., Ltd. has the same scale of production as it did in the first 4 months.

The recycling company buys 483.33 tons of waste plastics at the price of 2000 yuan per ton, and sells it to the North plastics products company at the price of 2400 yuan per ton (same as the sales price of other waste materials business units), and other information remains unchanged.

According to the current tax policy, the company is exempt from VAT.

The amount of tax allowed by the northern plastic products Co., Ltd. is 483.33 x 2400 x 10% + 40 000 = 155999.20 (yuan), the value added tax is payable, the output tax, the input tax = 1500000 * 17% - 15, 5, 9, 9, 20 = 99000.80 (yuan), the tax rate is 99000.80, 1500000 1500000 100%, 6.6% 6.6%.

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