I. Overview of VAT rate
Value-added tax is a kind of turnover tax based on the value-added amount of goods and services in circulation. In the car rental business, the leasing company provides the lessee with the right to use the car and collects the rent, which belongs to the tangible movable property rental service and should pay value-added tax.
Second, the general taxpayer tax rate
According to the provisions of China's tax law, the tax rate for general VAT taxpayers to provide tangible movable property leasing services is 13%. This means that if the leasing company is a general taxpayer, its rental income needs to be calculated and paid VAT at the tax rate of 13%.
Third, the tax rate of small-scale taxpayers.
For small-scale taxpayers, the rate of VAT collection is relatively low. In China, the value-added tax rate of small-scale taxpayers providing tangible movable property leasing services is 3%. However, according to the adjustment of national policies, small-scale taxpayers may enjoy preferential policies of reducing or exempting value-added tax in a specific period. For example, in 2023, the small-scale taxpayer's VAT collection rate policy was adjusted to apply 1%.
Four. Consider other taxes and fees
In addition to value-added tax, car rental companies may also involve other taxes and fees, such as urban maintenance and construction tax, education surcharge and so on. The tax rates and calculation methods of these taxes vary from region to region and need to be reported and paid with reference to local tax laws.
To sum up:
The tax rate of car rental fees mainly depends on the taxpayer status of the leasing company and the local tax laws. The tax rate of general taxpayers who provide tangible movable property leasing services is 13%, while the rate of small-scale taxpayers' VAT collection is relatively low, usually 3% (they may enjoy preferential policies in a specific period). In addition, other taxes and fees that may be involved also need to be considered. Therefore, before signing the car rental contract, it is suggested that both parties clarify their tax obligations and consult the local tax authorities to obtain accurate information.
Legal basis:
People's Republic of China (PRC) Value-added Tax Law (second draft).
Article 9 stipulates: VAT rate: 1. Taxpayers selling goods, processing and repairing services, tangible movable property leasing services, and importing goods, except for items 2, 4 and 5 of this article, have a tax rate of 13%.
Announcement of the Ministry of Finance and State Taxation Administration of The People's Republic of China on Defining the Tax Reduction and Exemption Policy for Small-scale VAT Taxpayers (No.2023 1)
Article 1 stipulates that from June 65438+ 1 October1day in 2023 to February 3 1 day in 2023, small-scale taxpayers with monthly sales below RMB 65438+10,000 (inclusive) shall be exempted from value-added tax. At the same time, from June 65438+1 October1day in 2023 to February 3 1 day in 2023, small-scale taxpayers of value-added tax will apply taxable sales income at the rate of 3%, and the value-added tax will be levied at the reduced rate of 1%; The withholding rate is 3%, and the withholding value-added tax is reduced by 1%.