The Textile And Garment Industry Will Benefit Significantly From The Current Round Of The Camp To Increase The Pilot.

From May 1st onwards

Pilot implementation of double expansion.

In March 24, 2016, the Ministry of Finance announced the four detailed rules and regulations on the comprehensive opening of the notice on the value-added tax of business tax, and made clear that since May 1, 2016, the pilot scheme of "camp expansion" has been put into practice.

The 4 industries of construction industry, real estate industry, financial industry and life service industry have been included in the pilot scale of business pformation and increase. Since then, all taxpayers of current business tax have been changed to value added tax.

Among them, the construction industry and the real estate industry apply 11% tax rate, the financial industry and the life service industry apply 6% tax rates.

The two is to include real estate in the scope of deduction.

Following the last round of value-added tax reform and the incorporation of machinery and equipment into the scope of the deduction, the reform will also include the real estate in the scope of deduction. Whether it is manufacturing, business or other original value-added tax payers, or the taxpayers who are changed to increase, they can deduct the added value tax added to the new real estate.

It is estimated that the scale of business tax increase and tax reduction in 2016 will exceed 500 billion yuan.

The industry will benefit significantly from the current round of the camp to increase the pilot.

Although the textile and garment industry itself belongs to the value-added tax industry, it does not belong to the camp to increase the scope. However, the current round of camp changes will increase the real estate investment into the deduction item, which has a clear effect of reducing the investment cost.

The textile and garment industry, which accounts for a larger proportion of real estate investment, will significantly benefit from the increase in the current camp.

We expect that the effect of tax reduction will be mainly reflected in two aspects.

First of all, two years' 60%+40% deductible input tax will directly reduce the value added tax paid by the company and improve the cash flow of the company.

Secondly, after the business tax is changed to VAT after the purchase of real estate, the tax base of the company's purchase of real estate will be reduced from original price to original price / (1+11%). Assuming that the real estate input tax is 11% of the upstream real estate industry and the construction industry, the depreciation can be reduced and the net profit will be thickened.

In 2015, the actual data were roughly calculated. Among them, the most profitable companies in thickening net profit were 7 major companies, namely, Melia, Huasheng, Xinghua, Hinur, Huasi, Huafang, and Vico. The impact on net profit was 23.18%, 16.75%, 9.60%, 8.88%, 8.66%, 8.59% and 5.17% respectively. The most profitable companies benefited from operating cash flow were 8, namely Jialin Jie, San Mao Pai Shen, Zhong Yin cashmere, modern Avenue, Xinlong holdings, Baron East, Huasi and Huafu color spinning, respectively. The current round of camp changes to increase the most beneficial to listed companies, we are based on

Risk warning.

The growth of the camp was slower than expected and the growth rate of the macro-economy declined.