Research on Owner’s Engineering Materials Purchasing Strategy under the “VAT” taxation method

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Under the current policy of switching to VAT taxation in China, there is an issue we need to consider with, that is how to use the reasonable strategy to reduce the procurement of materials in the engineering project cost. We base on the method of constructing mathematical models and actual case analysis, to analyse when suppliers provide VAT invoices with different tax rates, the owner should ask them how to discount the price of the corresponding material for the overpaid tax. The analysis results show that when the owner chooses the supplier, he should give priority to the one who can provide the special VAT invoices; when the supplier can only provide 3% of the invoice, he should require a discount of the material more than 15.45%; if the VAT invoice cannot be provided, the supplier should be required to provide a discount of 12.92% or even more.