Two departments issued tax reduction red envelopes, home care and elderly care and other industries welcome benefits

Living service industries such as catering, accommodation, and housekeeping will receive major benefits from lower tax burdens, including hairdressers who wash, cut, and blow dry their hair. They will also receive policy gift packages.

On October 8, the Ministry of Finance and the State Administration of Taxation officially issued the "Announcement on Clarifying the Additional Value-Added Tax Deduction Policy for the Life Service Industry", clarifying the period from October 1, 2019 to December 2021. On the 31st, taxpayers in the daily service industry are allowed to deduct an additional 15% of the deductible input tax for the current period against the tax payable (hereinafter referred to as the 15% additional tax deduction policy).

According to the previously issued "Announcement on Relevant Policies for Deepening Value-Added Tax Reform", from April 1, 2019 to December 31, 2021, taxpayers in the production and daily service industries are allowed to apply in accordance with the The input tax that can be deducted for the current period is added to 10% and deducted from the tax payable. This announcement clarifies that the 10% additional deduction ratio will be increased to 15%, which will effectively reduce the tax burden on the life service industry.

Housekeeping, elderly care and other industries will benefit

What industries can enjoy this preferential tax policy?

In accordance with the requirements of the "Notes on Sales Services, Intangible Assets, and Real Estate" (Issue No. 36 of Finance and Taxation [2016]), life services include industries such as culture and sports, education and medical care, tourism and entertainment, catering and accommodation, and daily services for residents.

The daily services for residents include city appearance and municipal management, housekeeping, weddings, elderly care, funerals, care and nursing, rescue and relief, beauty salons, massage, sauna, oxygen bar, foot massage, bathing, washing and dyeing , photography enlargement and other services.

Previously, Sun Ruibiao, deputy director of the State Administration of Taxation, explained at a press conference of the State Council Information Office that when the value-added tax rates of 16% and 10% are simultaneously reduced, the 6% tax rate will apply to production and daily life. For service industry taxpayers, the tax burden may increase due to the reduction in input tax. After repeated studies and calculations, comprehensive comparisons, and multi-dimensional demonstrations, the Ministry of Finance and the State Administration of Taxation finally determined the policy of applying a 10% additional input tax credit to them.

Sun Ruibiao explained that the basic principle of value-added tax is "what is levied is deducted", and specific taxpayers are allowed to add an additional 10% deduction in the current period. This 10% is calculated virtually. Therefore, the essence of the super deduction is a tax preference. It is a temporary preferential policy specially introduced to effectively reduce the tax burden of taxpayers subject to the 6% tax rate.

Cai Zili, executive deputy director of the Tax Reduction Office of the State Administration of Taxation and director of the Revenue Planning and Accounting Department, previously stated that deepening the value-added tax reform is the "highlight" of implementing larger-scale tax cuts and fee reductions this year, which mainly includes reducing The main measure is the tax rate and the three supporting measures are expanded deductions, additional deductions and tax refunds. From April to June this year, thanks to three supporting measures, the postal service, telecommunications, modern service industry and daily life service industry all achieved tax reductions, with a total tax reduction of 20.4 billion yuan.

Additional deductions can significantly reduce the tax burden

How are super deductions calculated? How much tax can be deducted for taxpayers?

Take a hotel as an example. Hotel A is a general taxpayer of VAT. Assume that its sales of accommodation services in April 2019 were 500,000 yuan and its output tax was 130,000 yuan. It obtains special VAT The input tax indicated on the invoice is 100,000 yuan, and the input tax deducted in installments from the transferred real estate is 10,000 yuan. The total input tax deductible for the current period is 110,000 yuan. Therefore, according to the previous regulations, the super deduction ratio is 10%, and the super deduction amount that Hotel A can accrue is 110,000 × 10% = 11,000 yuan.

The output tax of hotel A in April was 130,000 yuan, the input tax was 110,000 yuan, and the tax payable for the month was 20,000 yuan, which is greater than zero and greater than the deductible additional deduction amount of 1.1 for the current period. Ten thousand yuan. Therefore, the actual value-added tax paid that month was 20,000-11,000 = 9,000 yuan.

According to the new regulations, the super deduction ratio has increased to 15%. The super deduction amount that Hotel A can accrue is 110,000 × 15% = 16,500 yuan, and the actual value-added tax paid that month It is 20,000-16,500 yuan = 3,500 yuan.

In comparison, the hotel paid 9,000 yuan in value-added tax before October; according to the new regulations, the value-added tax paid will be reduced to 3,500 yuan.

Burden reduction measures will help attract jobs

What are the impacts of this tax cut policy? Will the service price be lowered?

During the National Day holiday that just passed, domestic hotel and air ticket prices dropped to varying degrees compared to the same period last year. Data released by Qunar.com shows that the average price of domestic hotels during this year’s National Day holiday is 353 yuan per night, down 24.9% from the average price during the National Day holiday in 2018; the average naked ticket price for domestic flight ticket bookings is 837.32 yuan, down from the same period last year. The average price dropped by nearly 50 yuan. Is this related to the additional deduction for the lifestyle services industry? Li Xuhong, director of the Institute of Fiscal and Taxation Policy and Application of the Beijing National Accounting Institute, analyzed to reporters that the income of the living service industry has been deducted since April, and there are two possibilities for the decline in the price of living services during the National Day: one is market factors; It is related to demand, that is, merchants are forced to cut prices in order to stimulate consumption; another possibility is that merchants’ tax burdens are reduced, so profits are passed on to consumers to further stimulate sales.

Li Xuhong further told reporters that the life service industry is related to people's livelihood. Such enterprises have a wide coverage, and their vitality is beneficial to stabilizing the market and providing better services. In addition, most of the service industries are labor-intensive enterprises. The burden-reducing effect brought about by increasing their deductions will help absorb the ordinary labor force, solve employment problems, and at the same time enhance the sustainability of the life service industry. In the long run, the prices of daily services are expected to decrease, providing more convenience to the people.

Shi Zhengwen, director of the Fiscal and Taxation Law Research Center of China University of Political Science and Law, believes that the 2019 Government Work Report pointed out that the value-added tax reform will be deepened and the tax rate of 6% will remain unchanged, but by adopting measures to increase production and daily services Supporting measures such as increasing tax deductions for industries will ensure that the tax burden of all industries is reduced but not increased. Setting this policy during the transition period will help reduce the tax burden of enterprises in the life service industry and is important for ensuring people's livelihood, stabilizing the market, and expanding consumption. promotion significance.