BT to VAT reform in securities industry
        The national business tax (BT) to value added tax (VAT) transformational pilot programme (B2V Pilot Programme) has been practiced for over 3 years since 1 January 2012. The State Council's initial schedule striving for completing the overall B2V reform in the 12th Five-Year Plan period has changed. So far, four sectors including finance and insurance, construction, real estate and consumer services are still not subject to VAT. Finance and insurance sector is expected to be the last sector covered by the B2V reform with the implementation probably in 2016.

        Generally, analysis on the B2V reform in finance and insurance sector are more focused on banking and insurance industries. However, the securities and assets management in the financial industry also encounter with common issues of financial industry, for example how to transfer output VAT; how to obtain effective input VAT credit, and whether business tax reduction or exemption policies for certain income under existing business tax system continue to be effective. Relevant enterprises should assess and attach great attention to potential issues faced in the B2V reform, and evaluate the reform's impact on corporate finance and chain effects on business departments, system support and supplier-customer relationship based on their business positions, so as to make full preparation to realise a smooth transition.