Case
My company is a foreign investment enterprise, equipment leasing agreement signed in November 2013 with a German company, leasing equipment for production use within the territory of china. The agreement, our company of German A company equipment rental, lease two years, to pay a monthly rent of 100000 euros; our company pay the deposit of 200000 euros, the German company after receiving the deposit will equipment to our company, both parties for rental taxes generated their own. The business involves the tax?
I
The lessee tax analysis
According to the "customs import and export goods tax management approach" (the General Administration of customs, order No. 124th) the provisions of article thirty-sixth, import tax lease obligations of goods, except as otherwise provided, shall go through the formalities for import declaration and tax declaration formalities at the customs of the local. The taxpayer to declare the import goods shall be submitted to lease, lease contract and other relevant documents to the customs. The customs considers it necessary, the duty payer shall provide a duty guarantee. The provisions of article thirty-seventh, leasing import goods from the entry date to complete the customs formalities rental end date, shall be subject to customs supervision. A one-time payment of the rent, the taxpayer shall pay tax formalities in the import declaration of the leased goods, pay taxes. Pay by installments, the taxpayer shall declare in the leasing of imports of goods, handle the formalities in accordance with the first period shall pay the rent, to pay the corresponding taxes; in the next installment payment of rent, the taxpayer to declare to the customs to handle the formalities shall pay the rent every time not later than fifteenth days after. If a taxpayer fails to declare tax within the prescribed time limit, the customs in accordance with the obligatory duty payer to pay the rent after each fifteenth day applied the goods tax rate levied taxes levied, the corresponding exchange rate, and since the provisions of this paragraph of the declaration for tax to the taxpayer to declare tax payment date shall collect taxes should pay a late fee of 5/10000 up procedures date of expiration of the time limit.
Combined with the Provisional Regulations on value added tax and import and export tariff regulations. Article second, the provisions of article third, the import of equipment leasing company, need to pay import value-added tax and tariff according to rent, the value-added tax rate of 17%, tariff tariff number determined according to the equipment. The leased equipment from the entry date to complete the customs formalities rental end date subject to customs supervision.
Provision of Stamp Tax Taxable Items and tax rates table, contract of lease of property including rental housing, ships, aircraft, motor vehicles, machinery, equipment, equipment contract. The detailed rules for the implementation of the second provisional regulations on stamp duty, in writing, within the territory of the people's Republic of China to receive the regulations cited document, refers to the China shall have legal effect, legal protection by China certificate. The above documents both in Chinese within or outside bookend, are subject to stamp tax according to regulations.
Therefore, equipment rental agreement your company signed with the German company, belonging to the lease of property contract, both sides should according to "contract" rental property under the lease amount 1/1000 decals.
Analysis of the lessor tax
"The Ministry of finance, the State Administration of Taxation on the railway transport and postal industry into the notice of business tax VAT pilot" (fiscal 2013) (No. 106) "the provisions of the attached notes to the scope of taxable services", tangible movable property leasing, including tangible movable property leasing and operating leasing of tangible movable property. Tangible movable property operating lease, is within the agreed time items, equipment and other tangible chattel transfer to others and leasehold ownership does not change the business activities.
Therefore, the German company leased equipment belongs to provide leasing of tangible movable property.
"Business tax VAT pilot implementation measures" (Caishui [2013] document No. 106 of Annex 1) the provisions of article tenth, the provision of taxable services in the territory, is refers to the taxable services provider in China or the receiving party. The following situation does not belong to the provision of taxable services within the territory of China: overseas units or individuals to domestic entity or individual rental completely in the overseas use of tangible movable property.
Accordingly, the German company to rent equipment for your company and using in China, because of your company as to accept the service side in the territory, the German company belongs to provide rental services within the territory of China, shall pay value added tax, the tax rate is 17%, the corresponding need pay urban construction tax, surcharge for education, Local Educational Surcharges such as additional tax.
According to the tax (2013) Document No. 106 of Annex 1 provisions of article sixth, outside the people's Republic of China (hereinafter referred to as foreign) units or individuals providing taxable services in the territory, in domestic has no business institution, value added tax withholding agents as their agents; in the territory of no agent, value-added tax withholding obligations people to the receiving party. The German company in China, not a business management mechanism nor an agent within the territory of China, your company required to withhold its value-added tax and additional.
According to the enterprise income tax law regulations for the implementation of article seventh (five) regulation, rental income, in accordance with the burden of paying enterprise or institution, site, or pay the individual residence in accordance with the burden, to determine the source of.
For the payment of rent for your company in the territory, the German company made the rental fee is derived from the territory of the income. According to law of enterprise income tax of third paragraph third, non resident enterprises that have set up institutions, in China places within the territory of China, or has an organization, places but with the income obtained by the institutions, places no real connection, should be its source in China domestic income and pay enterprise income tax. Shall pay enterprise income tax at a rate of 10% German companies. According to the "State Administration of Taxation on Relevant Issues of tax VAT pilot business tax change in non resident enterprises shall pay enterprise income of the notice" (

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