The individual rented the writing building for the company's office and the individual needed to invoice the company for the rental fee before the enterprise's income tax. What are the taxes, what are the rates and what are the taxes? Here's an analysis by example:
How much taxes do you have to pay for renting a building under the name of a company for 800 square metres, $360,000 a year, a three-generation ticket? (assuming a local urban land use tax of $8/m2/year)
Taxes associated with the rental of a personal writing building:
1 vat: vat at a rate of 5 per cent and taxable = 5 per cent of sales plus tax
Note: for the period from 1 january 2023 to 31 december 2027, rental income earned by natural persons on rental of real property in the form of a one-time rental charge can be shared equally over the corresponding lease period, with vat exemptions for monthly rental income of less than $100,000。
Urban tax, surcharge: the corresponding urban tax (7 per cent, 5 per cent, 1 per cent) and education fee surcharge (3 per cent) and local education fee surcharge (2 per cent) based on the actual transfer tax paid
3. Stamp duty: stamp duty under lease contract at 0. 1 per cent
4 property tax: paid at 12 per cent of rental income
5. Urban land use tax: non-residential housing rented by individuals, within the limits of the urban land use tax, shall be subject to the municipal land use tax. The amount is reduced by half per square metre per year and is determined by the people's governments of the provinces, autonomous regions and municipalities directly under the central government in accordance with local realities.
6. Tax: the tax rate is 20 per cent based on the income derived from the lease of property, with some costs deductible. For each income not exceeding $4,000, the cost is reduced by $800; for each income above $4,000, the cost is reduced by 20 per cent。
An individual may benefit from a preferential policy of halving the “six-tax double fee” compared to small taxpayers:
From 1 january 2023 to 31 december 2027, a resource tax (excluding water resources tax) was levied on halving the value-added tax (vat) for small taxpayers, micro-enterprises and self-employed entrepreneurs, a urban maintenance tax, a property tax, a urban land use tax, a stamp tax (excluding stamp taxes on securities transactions), a cropland occupancy tax and an education surcharge, and a local education supplement。
What taxes do individuals pay for renting a writing building
Returning to the example above: zhang three-rent personal office building for a company with an area of 800 m2 and an annual rent of $360,000, calculated as follows:
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Value added tax: no more than $100,000 in monthly rent after contribution
Urban plus: vat basis for tax exemption
Stamp tax: 360,000*. 001*50% = 180
Property tax: 360,000*12%*50% = 21,600
Urban land use tax: 800*8*50% = 3200
1-20% = 53603. 2
Total tax payments: 180+21600+3200+53603. 2 = 78583. 2
Combined tax: 78583. 2/360,000 = 21. 8%
In this case, the combined tax on three rented writing buildings was about 22 per cent, with the highest rate of 68 per cent of the total tax, while in some cases the combined tax would be lower if the tax were approved。
