VAT reform provides a good opportunity to research the impact of the indirect tax reform on the firm fixed assets investment and structure. Using DID method and the enterprise data from 2007 to 2009, We find that the VAT reform in 2009 significantly increases business investment in fixed assets, specifically enhances the investment on machinery and equipment, but not the investment on plants and buildings. Reform makes the difference between the investment rate of machinery equipment and plant buildings more significant, and the investment structure of enterprise is improved. We also find that the non-state-owned enterprises and state-owned enterprises are not different in terms of machinery and equipment investment, but state-owned enterprises are more positive in the building investment in 2009. The result of triple differential analysis method shows that it is not the effect of the reform.
