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Major adjustments in replacing business tax with value-added tax in construction industry.

On March 11th, the Ministry of Finance and the State Administration of Taxation jointly issued the “Circular on the policies for replacing business tax with value-added tax pilot reform in construction services”, clarifying the policy of replacing business tax with value-added tax in the construction service industry, duty-free for the transfer of contracted land to agricultural production and value-added tax policy of discount and rediscount
Three key points of this policy:
(1) Applicable objects: General construction contractors. As to why it is only applicable to general contracting units, it is related to the relevant laws and regulations on general contracting and subcontracting.
(2) Specific business: Foundation and main structure of house construction. It can be understood as "foundation (including earthwork, foundation pit support, foundation treatment, pile foundation, concrete foundation, section steel, concrete-filled steel tube foundation, and steel structure foundation)" and "main structure (including concrete structure, masonry structure, steel structure, steel section, concrete-filled steel tube structure, light steel structure, cable-membrane structure, aluminum alloy structure and wood structure). Since it is clearly limited to "house construction", it cannot be extended to bridges, roads and other buildings and structures.
(3) Scope of application: engineering services and engineering operation on the construct or rebuild buildings and structures. It can be understood as: construction work to provide foundations and main structures for the house construction.
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