After the business tax to value-added tax reform, the construction project business tax will be changed to value-added tax, with a tax rate of 11%. The “VAT to VAT” reform in the construction industry involves the construction industry and its upstream and downstream industrial chains. The actual tax burden of construction companies is likely to increase.

After the business tax to value-added tax reform in the construction industry, the cost of construction and installation projects will be calculated according to the "separation of price and tax" pricing rules. The calculation formula for the unit price of water conservancy and hydropower engineering construction and installation projects remains unchanged. The pre-tax project cost is the sum of labor cost, material cost, machinery usage fee, measure fee, indirect cost, profit, main material price difference, main material fee (or unpriced installation material fee), each cost item is excluding value-added The input tax is calculated based on the price, and based on this, the output value-added tax included in the unit price of the construction and installation project is calculated.

After the business tax is replaced by VAT, tax = (output tax - input tax) construction cost? = (expense before profit and tax + profit + tax)

= (tax expense before profit and tax) + input tax) + profit + tax payable

=tax expense before profit and tax + profit + (tax payable? + input tax)

=tax expense before profit and tax + profit +Output tax expansion information

Before replacing business tax with VAT, a senior project manager could estimate the cost of a simple project very accurately in his mind. For example: For an earthwork project in a certain county, the workload is 100 cubic meters, and the costs of manpower, materials, and machines are 50, 20, and 10 respectively. Then, the cost is 8,000 yuan. Adding 30% management fee and 20% profit, without considering risk factors, the total is 12,000 yuan.

Business tax and surcharge = 12,000×3.41% = 409.5 yuan

So, the final project cost is 12,409.5 yuan.

Both Party A and each bidder can form their own project cost based on their own understanding of workload, cost, management rate, and profit rate.

After the business tax to value-added tax reform, it is not that simple. The fundamental reason is that value-added tax is an extra-price tax, and the tax is extra-price. In order to form a correct cost, the "deductible value-added tax" must first be "broken" out of the price.

The General Office of the Ministry of Housing and Urban-Rural Development issued a notice on adjusting the project cost calculation method (Jianbanbiao [2016] No. 4) before the Ministry of Finance and Taxation No. 36. This was in the name of the General Office rather than the Ministry. The notice issued by the Ministry of Finance provides a very general guidance on the project cost, which can be roughly divided into three steps:

① First calculate the cost excluding deductible value-added tax?

②On this basis, add management fees and profits and other markups

③Multiply by 111% to get the cost of the entire project under the value-added tax environment.

Baidu Encyclopedia - Construction and installation project taxes