Shipping Faces "Breaser Change"

From August 1st, the pilots of “transformation and sales increase” in the transportation industry and some modern service industries have been pushed out across the country. For the shipping industry, which is in a deep depression, what impact will this “campaign change” bring? Can the adjustment of the tax structure promote the recovery of the market? How can some shipping companies cope with the "labor pain" that occurs in the short term?

Neutral influence on flying companies
It is understood that in this VAT pilot, the applicable tax rate for shipping companies’ self-operating and futures lease business has changed from 3% of the original business tax to 11% of value-added tax, and the applicable tax rate for ship light rental business has changed from 5% of the original business tax to value-added. Taxes are 17%, providing modern service industry services (except for tangible property leasing services) is 6%. After the reporter learned of the situation, it was found that the tax burden on shipping companies implementing this policy has risen or declined.

Zhang Shouguo, vice president of the China Shipowners Association, told reporters that after the pilot “Zhan Gai Zai Zeng” was fully launched, sample surveys showed that there was an increase in tax burden among shipping companies, and some shipping companies’ burden increased by 20%.

According to this VAT related policy, the fixed asset of the pilot company purchased after 2012 is allowed to offset the input tax, and the previous inventory of fixed assets does not belong to the deduction scope. Zhang Shouguo analyzed that for shipping companies, the bulk of expenses is shipbuilding expenses, and now the shipbuilding invoices are not VAT invoices, and the shipbuilding expenses cannot be deducted; the life span of a ship is more than 20 years. Ships built in previous years are now every year. There is no deduction for this part of the discount fee. Second, the cost of labor information of shipping companies accounts for about 20% of the total cost, and the compensation paid to employees cannot be deducted. Third, the cost of capital, road and bridge fees, housing rent, and insurance premiums cannot be deducted. For shipping companies, most of the major components of the cost structure after the “reform from business reforms” cannot be deducted, and the tax rate has increased significantly, which has led to an increase in the tax burden of shipping companies.

A pilot report of China Shipping Group analyzes that the input tax for eligible incremental fixed assets can be deducted at one time. At the same time, due to the lack of regularity in the purchase cycle, there is an increase in the value of VAT during the use of incremental fixed assets. The imbalance, that is, in the initial period of incremental fixed assets put into use, the input tax amount is large enough, after all the output tax amount formed by domestic trade transport is deducted, there may be a deductible tax in the certain period, and the tax burden of the enterprise is reduced. However, after the full amount of input tax for incremental fixed assets is deducted, if there is no sufficient input tax to be deducted from the purchase of new ships, the value-added tax paid by the company will increase and the overall tax burden will increase.

At the same time, there are also some shipping companies applauding for “reform by business increase.” According to an open report, from December 1, 2012 to the end of June of this year, since the implementation of the “Zhanyingzao” pilot, Zhejiang Taizhou shipping companies’ overall tax cuts 10.43 million yuan. The tax burden of the 27 general taxpayers in 69 shipping companies across the city has been reduced to some extent before the trials, with a total reduction in tax liabilities of 11.96 million yuan, and a single company has reduced the tax burden by a maximum of 4.247 million yuan; the tax burden on 37 companies and before the trial The level of taxation of the 5 general taxpayers has risen to varying degrees before the pilot point.

"As defined by the tax law, the value-added tax should be smaller than the tax burden brought by the business tax to the society." A shipping industry researcher said that with the expansion of the scope of value-added tax, it can offset the value-added tax after the tax reform. The high tax rate of business tax is to help the shipping industry in a downturn to develop better. Therefore, the phenomenon that some companies’ tax burdens have not been reduced or increased will still need to wait patiently for further reforms to be eliminated. An industry analyst told reporters that according to calculations, the impact of “business change” on the shipping industry as a whole is generally neutral.

Reforming policies

In the short term, it is a fact that the “reform from business reforms” has had an impact on the cash flow of some companies. For example, the “campaign increase” has increased the operating pressure of chartering vessels. At present, some shipping agents and natural person shipowners are unable to provide charter services because they cannot obtain the billing qualifications, making the charter of the company's charter narrower and making chartering more difficult. For most of the businesses that rely on foreign rental capacity for their business operations, their operating pressures tend to increase.

In addition, the cost of self-owned vessels after the “reform from the business” has increased. Since the input tax can offset the output tax, regular VAT invoices are required for ship repairs and spare parts purchases. In this way, the qualification standards for shipyard repair qualifications and spare parts procurement will both increase, and the cost of the increase will be to increase the aforementioned fee standards, leading to an increase in the cost of own-ships.

Faced with the temporary increase in tax revenues, some companies have taken measures to actively respond to market conditions that are still at a low level. The relevant person in charge of the China Long Airlines Company’s Penghu Branch told reporters that after one year of pilots, shipping companies widely publicized This makes the ship-owner realize that the reduction in value-added tax invoices of shipping companies after the “reformation increase” can indirectly reduce their product costs and increase their competitive advantages. This encourages shippers to rationally select carriers and engage in long-term in-depth cooperation with carriers. As a mutually beneficial community, the Yangtze River shipping competition has gradually become a virtuous cycle.

According to the reporter's understanding, at present, the shipping companies of the Yangtze River have a relatively small scale, except for the larger capacity of Changjiang China Changjiang Shipping Co., Ltd. under the name of Changhang Group. In the past, the cost of a single ship for a large-scale shipowner was higher than that of an individual owner, and the tax burden of a normalized ship company was higher than that of an individual owner. After the "reform from the camp", the scale of the Yangtze shipping will accelerate. Therefore, a shipping company uses its own advantages to attract individual shipowners and unify the individual shipowner's right to operate (that is, the ship operating right is changed to a company that is affiliated with the company, tax regulations, and only if it has the right to operate a ship, long-term owners have the right to issue votes), or completely renamed and changed. The ownership of the operation will increase the capacity of the shipping company without increasing the scale of its own assets. The scale will rapidly expand and create a competitive advantage. At the same time, it will be able to take advantage of the low cost of affiliated vessels and adopt the advantages of "scale" and "low cost". Grab the high ground of the Yangtze River shipping competition and end the situation of the Yangtze River shipping “fighting with each other” and “go it alone”.

After the shipping companies have grown large-scale, they have implemented centralized procurement, unified insurance, and unified port costs, thereby reducing ship repair costs, regulatory fees, ship insurance costs, spare parts procurement costs, etc., to obtain “differential cost” profits and formally converting the scale. For competitive advantage.

Relevant person in charge of the Penghu branch of China Changjiang Shipping Co., Ltd. told the reporter that after the “reform from the camp”, the cost of the logistics products in the Yangtze River can be deducted through VAT deduction. According to the calculation of the shipping price of the Yangtze River at 25 yuan, the deduction can be deducted by about 2.6 yuan. The previous business tax cannot be deducted. Now, the entire shipping market is very sluggish, and the company’s tax burden has increased since the “Zhan Gai Zai Zeng”. Therefore, the responsible person suggested that the shipping companies can communicate with customers, reasonably share the value-added tax policy “good” and raise the freight rate. At the same level, the reasonable return of the average profit rate of shipping on the Yangtze River has truly brought about a new vitality in the "green channel" of the Yangtze shipping industry.

In addition, some shipping companies have shifted part of their burden by adding value-added tax. A few days ago, COSCON issued a notice that “For the implementation of the policy of national business change, COSCO Container Lines Co., Ltd. has been collecting freight forwarding companies or shipping agency companies within China since August 1, 2013. The sea freight and other related expenses will be subject to 6% VAT (if additional tax and other additional fees will be added)." Several other international shipping companies such as Maersk, the Mediterranean, and CMA have also announced additional revenues.

Good for the shipping industry in the long term

In the promotion of the “business reform”, the policy makers described it as follows: “The reform of the camp” embodies the requirements for simplifying and standardizing the taxation system, basically eliminating the double taxation problem in the goods and services tax system and achieving a fair tax burden. ”

Taking the Yangtze River shipping industry as an example, after the “reform from the camp”, it will bring a variety of advantages in the long run.

It is understood that at present, the degree of organization of the Yangtse River shipping industry is very low, and there are very few physical shipping companies that truly talk about "scale and standardization." Ships are still operating in a "spoiling and braving manner." After the “Reform from the Camp,” due to the fact that the owner of the natural person or the small-scale shipping company cannot qualify for VAT invoicing, it will inevitably implement the corporatization mode of operation, which will benefit the organizational process of the Yangtze River Shipping; regular shipping companies of a large scale can come from the ship. Deductions are made in operating costs, reducing the impact of the increase in tax burden brought about by the increase in “battalion reforms,” and they are able to provide formal VAT invoices and are “favored” by customers in their operations because Changjiang Shipping Company is able to provide value-added tax invoices. It can offset the input tax, thus reducing the price of some transportation products and reducing the cost of shipping and logistics in the Yangtze River.

After the “business reforms increase,” we can also accelerate the pace of the scale of the shipping companies in the Yangtze River. Nowadays, many ships implement the affiliate business model in order to obtain bank loans, but they are only lending relationships with the affiliated companies and their business operations are still “individualized”. After the “reform from business”, on the one hand, the shipowner must rely on the regular shipping company for the purpose of invoicing; on the other hand, the affiliated company requires the affiliated ship to provide invoices and repairs such as burning materials in order to reduce the tax burden on the VAT invoice creation. Invoices and other cost-added tax bills are offset against the sales tax amount. Therefore, the two parties have “contrary power”. As a result, some affiliated shipping companies have gradually evolved into regular and self-governing vessels, and operate autonomously, that is, substantial shipping companies. Management norms and ship management companies of scale are more welcomed by shipowners and tax authorities of natural persons, and the scale will become its internal impetus. .

The Yangtze River shipping competition will tend to be standardized and rationalized. The reduction of self-employed shipowners, natural-agent agents, and non-shipping companies has led to a gradual reduction in the factors affecting the chaos of the Yangtze River shipping industry. With the increase in the number of large-scale shipping companies, their competitive behavior will become more rational and they will continue to call for market access. "Pace" or will take the first step. At the same time, under the existing freight rate at the break-even point, maintaining the original freight rate will not be able to survive, and as a result, the Yangtze River shipping price will increase.