Our country urgently needs to improve the taxation policy for used equipment

Recently, the National Equipment Rental and Used Equipment Professional Committee has received the Ministry of Finance's "State Administration of Taxation of the Ministry of Finance's Request for Simple and Uniform Value-added Tax Collection Rate" and the "Opinions on Soliciting Simple and Unified Value-added Tax Rate Policy Opinions." letter". In the document, it is proposed that "the current VAT system in China has too many tax rates, resulting in unfair taxation and complicated accounting issues, and it is urgent to carry out degeneracy and unification." Among them, major adjustments have been made to the taxation system for old-used goods, and the current policy of “adjusting the value of VAT on the basis of the rate of 4% for enterprises engaged in the sale of old-fashioned goods, with the actual levy rate of 2%” is adjusted to 3%” and asked for feedback as soon as possible.

Currently, a large number of used equipment in the engineering machinery industry, especially in the hands of manufacturers, is based on the old ones, or the difficulty in repaying users. The cost is much higher than the actual value of the depreciation of the equipment itself. Some people estimate that the second-hand equipment is levied according to the previous 2% tax rate, and the transaction process must reach 6% gross profit before losing money. What's more, now, in order to occupy the market share, most manufacturers are taking high and low sales to lose money. The strategy, if the tax rate rises by one percentage point, will inevitably worsen, and it will surely affect the new machine market that is already in the doldrums.

Based on this, the Association urgently prepared and set up a task group for the “Research on Tax Policy for Used Equipment” and on April 10, 2014, held the first working conference in Beijing's New Century Nikko Hotel. Attending this conference were the leaders of equipment leasing and used equipment professional committees of the China Federation of Used Goods, industry manufacturers, agents, financial institutions, and investment institutions, as well as a number of industry media friends.

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China's second-hand construction machinery market has broad prospects

As we all know, although China's construction machinery industry has experienced a sustained downturn, but from the general trend of development, with the introduction of various favorable policies of the country and the constant progress of infrastructure construction projects around the country, the development prospects of China's construction machinery industry is Good and secure. Taking the excavator as an example, it has always been regarded as the most important subdivision type in China's construction machinery industry, and it is one of the most profitable products in all types of construction machinery. It is also considered to be the most growth engineering machinery product in the future. In recent years, excavators have been the key driving force for the rapid growth of the entire construction machinery industry. Domestic sales increased from 7,926 units in 2000 to more than 90,000 units in 2009. In 2010, sales volume reached 161,142 units. In the following three years, although sales volume decreased slightly, sales in 2013 remained as high as 114,783 units.

Judging from the sales volume of excavators, China’s construction machinery has seen an overall increase in the number of its holdings in the past decade. From 1997 to 2012, the number of construction machinery in China rose from 4.37 million to 5.17 million; the existing amount of second-hand construction machinery in China was 5.24 million to 6.2 million, at least 20%; within 10 years of this The value of second-hand construction machinery is worth 1.377 billion yuan to 1.572 trillion yuan.

Therefore, China's second-hand equipment is rich in resources, and the huge market share provides a reliable and necessary resource base for the prosperity of the used equipment market. With the continuous increase in the quantity of the construction machinery market, the transaction scale of second-hand construction machinery is also constantly expanding and showing an upward trend. In 2000-2012, the trading volume increased from several hundred units to nearly 100,000 units. It is expected that the annual sales of used excavators will exceed 120,000 units in 2013, and 400,000 units will be estimated at an average price. The transaction volume of used excavators will exceed 700 billion yuan. In the next ten years, the annual transaction volume of used equipment in China will reach 500,000 units or more, and the market will reach nearly 2 trillion yuan. The mature construction machinery market with new and second mobile phone trading volume of 1:1 will show up in the country.

China's second-hand construction machinery market disorder

The continuous increase in the quantity of China's engineering machinery market and the ever-expanding scale of second-hand construction machinery transactions make China's second-hand construction machinery market a promising development prospect. However, as the President of the China Association of Used Goods and the Chairman of the National Committee of Equipment Rental and Used Equipment, Mr. Yan Yezhen pointed out at this meeting, China's construction machinery industry has entered the post-market era and is now facing enormous challenges.

Broadly speaking, aftermarket is also called equipment after-sales service market. It refers to various services in the process of equipment use after equipment sales. It covers all the services that consumers need after purchasing equipment. China's construction machinery market has stepped into the post-market era and will shift from extensive development to specialized operations. The next 15-30 years will be the golden period for the development of the second-hand equipment distribution industry. The company's core market will shift from product sales to services. The recovery of used equipment, maintenance services, refurbishment certification, operating leases, leasing services, spare parts marketing, and second-hand market operations will flourish and the market industry chain will continue to improve. The main force of the used equipment market is to be transformed into a company.

However, all industries have a common feature when they enter a new stage. They are chaotic and disorderly. The Chinese construction machinery industry is no exception. Ms. Yu Xiaomei, Secretary-General of the National Equipment Rental and Used Equipment Professional Committee, introduced at this meeting that although the post-market era of construction machinery has arrived, the management ideas and concepts of Chinese enterprises have not yet fundamentally changed. As far as the used equipment industry is concerned, with the exception of loaders and bulldozers, the shadow of domestic-funded brands can hardly be seen in other types of machinery. At present, various companies are using the second mobile phone business as a means to promote new machines. They have not really taken the second-hand equipment business seriously. As for purely operating second-hand equipment, it is a blank.

These are the chaotic and disorderly phenomena existing in the field of used equipment operations. In addition, in many other aspects of this field, there are also factors that restrict the development of the secondary construction machinery market. From the perspective of national regulation and control, for this second-hand equipment industry, the lack of market supervision, the absence of laws and regulations, the implementation of different taxation policies, and the support policies of the industry are even blank; from the point of view of industry development, the concept of used equipment is understood and The use of the industry has not yet been widely accepted by the business community, but there is currently no industry, but the role of industry associations is difficult to play; and from the perspective of corporate development, the current industry is disorderly and unregulated marketing competition, lack of a correct corporate system and business philosophy .

The background and urgency of the establishment of the “Research on Tax Policy for Used Equipment” task group has been excessive in the current VAT system. From the situation reflected by public opinion in recent years, it is generally doubtful about this system and considers it to be a simple method to apply value-added tax. However, due to differences in products or differences in the type of taxpayers, different levy rates will be directly affected. The operation is more confusing. In addition, the excessively high collection rate also leads to a complex tax system, which increases the accounting workload of the tax authorities and taxpayers, and also increases the taxation costs of the two parties involved, which increases the tax risk of policy abuse. At present, relevant companies, industry associations, and competent authorities, as well as grass-roots tax authorities, have responded to this problem through various channels, suggesting that they be adjusted and improved as soon as possible. It seems that problems such as unfairness of taxes and complicated accounting due to the problem of overtaxing the collection rate in the current VAT system have become increasingly prominent, and there is an urgent need for degeneracy and unification.

As a result, the first working meeting of the Task Force on "Research on Tax Policy for Used Equipment" held this time was to see the problems existing in the taxation policy, led by the Equipment Rental and Used Equipment Professional Committee of the China Federation of Used Goods. , Organizations within the industry, manufacturers, agents, financial institutions, investment institutions and other representatives to discuss the development of the industry's countermeasures.