A vehicle is a tangible asset, a company rents a car from an individual, falls under the category of “rents of tangible movable property”, and how is the tax rate on invoices for vehicle rental income calculated? A summary of this sub-section is given below。
Invoice tax calculation for vehicle rental income
Vehicles are tangible movable property, with a general taxpayer tax rate of 13 per cent and a small taxpayer tax rate of 3 per cent. As a general vat taxpayer, engaged in the leasing of tangible movable property (cars), regardless of the invoice issued (including vat-specific or ordinary invoices), the vat tax is calculated at a rate of 13 per cent。
Policy basis:
Circular of the ministry of finance of the state tax administration on the piloting of the introduction of the railway transport and postal industry into the turnover tax for the value-added tax (fiscal) [2013] no. 106: business tax conversion to value added tax pilot scheme:
Vat rate:
(i) provision of rental services for tangible movable property at a rate of 13 per cent。
(ii) provision of transport and postal services at a rate of 19 per cent。
(iii) provision of modern services (except rental services for tangible movable property), at a rate of 6 per cent。
(iv) taxable services provided by the ministry of finance and the national tax administration at zero rates。
Article 13 the vat collection rate is 3 per cent。
Car rental tax
In the case of vat general taxpayers, car rental drivers are in the "transport industry" with 11 per cent vat. At the same time, provision is made for public transport services provided by general taxpayers among pilot taxpayers, with the option of paying value-added tax at a rate of 3 per cent based on a simple tax method
Policy basis:
Article 14 rules for the application of the provisional regulations of the people's republic of china on value added taxes
When a general taxpayer sells goods or taxable labour, using a combination of sales and sales taxes, sales are calculated using the following formula: sales = sales containing taxes (1+ rate)
