Tax Planning For Mobile Phone Sales

When people buy a cell phone, they often find that the price of the same mobile phone sold by different sellers is different, and the sellers' explanation is that the purchase channels are different.

Indeed, because there are differences between first class dealers, two level dealers or even three level dealers in mobile phone sales, their purchase price is different. In order to ensure certain profits, there will be different selling prices, but this is only one of the factors that cause different prices of mobile phones.

What people do not understand is that because of the different identities of sellers, the tax burden they sell on mobile phones is light and heavy, which is an important factor that causes different prices of mobile phones and a factor determining the profits of sellers.

Therefore, for mobile phone sellers, choosing the right sales identity can get the biggest profit. For consumers, they understand the difference of tax burden of different sellers.

It will find out which sellers sell mobile phones with room for reduction in order to get the most affordable mobile phones.

What is the difference between "identity" of mobile phone sellers?

At present, mobile phone vendors mainly have the following types: China Mobile, China Unicom and other telecom operators. They sell both mobile phones and radio pmitters, and large and medium sized mobile phone sales counters, which belong to shopping malls, do not pay taxes independently; mobile phone stores and so on.

These sellers are different in their tax status.

In general, the sale of mobile phones should be subject to VAT, while VAT taxpayers are divided into two categories: general taxpayer and small scale taxpayer. The tax rates applied by the two party are different and the tax burden is different.

Large and medium sized shopping malls, mobile phone sales counters, larger mobile phone stores are often VAT general taxpayers, and small scale mobile phone stores are often small-scale taxpayers.

Because the existing tax law stipulates that telecom operators sell mobile phones and provide radio pmission business, which is a mixed selling behavior, paying business tax instead of paying value-added tax.

Therefore, in the mobile phone sales, the above three different tax status have been formed.

The tax burden of the three retailers is as follows: first, the tax burden of telecom operators and small taxpayers.

Telecom operators sell mobile phones and provide launching services. They are mixed sales according to the tax law, and pay business tax at 3% tax rate.

When telecom operators pay business tax, they do not only pay taxes on mobile sales, but also pay sales tax on mobile sales and telecommunications services during a tax period.

For convenience of analysis, we only calculate the sales volume of mobile phones.

Assuming that the selling price of a mobile phone is 2000 yuan, the telecom operator should pay a business tax of 60 yuan, and a small taxpayer needs to pay a value-added tax at a rate of 4%, with a value added tax of 76.92 yuan.

The tax burden of telecom operators is 3% of the selling price, while the tax burden of the small-scale taxpayers is 3.85% (4% divided by 1.04) of the tax selling price, and the difference between the two is 0.85 percentage points. If we consider other taxes and tax deductions, the difference will be even greater.

That is to say, if the selling price of the two party is 1000 yuan, the gross profit of the telecom operator will be 8 yuan more than that of the small taxpayer. Theoretically, the telecom operators will have more room to reduce the price.

Secondly, the tax burden of telecom operators and VAT general taxpayers is compared.

General taxpayers sell mobile phones and pay VAT at a rate of 17%, because they can deduct the input tax, and the actual tax burden is different because of different purchase price and selling price.

Suppose that the selling price of a mobile phone is 2000 yuan, and its tax included price is 1700 yuan, then the input tax is 247 yuan, the output tax is 290.6 yuan, and the value added tax shall be paid 43.6 yuan.

We can find out the balance of tax burden between the two sides through formulas.

The tax burden of telecom operators is 3% of the selling price, and the general taxpayer's tax burden is multiplied by 17%, which makes the two equal. It can be found that when the increment rate is equal to 17.65%, the tax burden of the two parties is the same (here neglects the influence of other taxes and fees).

That is to say, when the gross profit margin of mobile phone sales is less than 17.65%, the tax burden of general taxpayers is light, otherwise, the tax burden of telecom operators is light.

Third, a comparison of the tax burden between the general taxpayer and the small scale taxpayer.

We have analyzed before that the balance of the two tax burden is 23.53% gross profit margin, that is, the gross tax rate is less than 23.53%. The general taxpayer has a low tax burden, whereas on the contrary, the small-scale taxpayer has a low tax burden.

Summary of the above analysis, we can see that when the gross margin of mobile phone sales is less than 17.65%, the tax burden of the general taxpayer is the lightest, the telecommunications company is the second, and the small-scale taxpayer is the heaviest. When the gross margin of sales is greater than 17.65% and less than 23.53%, the tax burden of telecom operators is the lightest, the general taxpayer is the second, and the small-scale taxpayer is the heaviest. When the gross margin of sales is more than 23.53%, the tax burden of telecom operators is the lightest, the small scale taxpayers are the second, and the general taxpayers are the heaviest.

According to the above conclusions, there are two ways to plan the mobile phone dealers: first, the mobile distributors should choose the mobile phones that sell, and choose the mobile phones with appropriate gross margins to sell.

For example, small-scale taxpayers and telecom operators should try their best to choose the latest and high margin mobile phone sales, while the general tax payment should sell mobile phones whose gross margins are less than 23.53%.

Secondly, appropriate changes should be made to the operating organization.

As for the first planning method, we can see that there are obvious defects.

Because no matter how heavy the tax burden is, the mobile phone with a large price difference will always get more profits.

If the general taxpayer does not sell the latest and high margin mobile phones, the losses will be even greater.

The plan is to separate the general taxpayer from the business, and to sell the mobile phone with a value-added rate of more than 23.53% by the newly established small scale taxpayer, which will not only get the high profit of the new mobile phone, but also avoid the excessive tax burden.

For telecom operators, they should sell as much as 17.65% of the value added mobile phones. At the same time, by changing and reforming the system, they will set up independent accounting distributors who belong to the general taxpayer, and sell mobile phones whose value-added rate is less than 17.65%.

At present, there are a lot of old mobile phones with low value-added rate in the mobile phone market. The value-added rate is generally not higher than 15%. At the same time, new mobile phones with high value-added rate have been introduced. The value-added rate is about 30%, and two kinds of mobile phones have their own consumer groups.

It is feasible in theory and practice to obtain more profits through the above plan.

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