According to the tax laws of China, car rental income is subject to tax. If it is a general taxpayer of value-added tax, and the car rental is equipped with a driver, it belongs to the "transportation industry", and the value-added tax of 10% is levied. If you don't have a driver, it belongs to "tangible movable property rental service" and the VAT rate is 16%. As for personal income tax, according to the individual income tax law, the rental income obtained by renting vehicles (without operators) needs to be paid at the tax rate of 20%.

Car rental business needs to pay two main taxes in China: value-added tax and personal income tax.

1, VAT: This is mainly aimed at companies or enterprises. When a car rental company rents a car, if it is equipped with a driver, then this service is considered as "transportation" and needs to pay VAT at the rate of 10%. If there is no driver, just renting a car, then this is considered as "tangible movable property rental service" and the tax rate is 16%.

2. Personal income tax: This is for individuals renting vehicles. If an individual rents a vehicle (without an operator) and obtains rental income, then this income needs to be subject to personal income tax at the rate of 20%. However, there are certain reduction and exemption policies. For example, if the rental income does not exceed 4,000 yuan, the expenses of 800 yuan can be deducted; If it exceeds 4000 yuan, the remaining amount after deducting 20% of the expenses is taxable income.

The difference of paying taxes on car rental income;

For companies or enterprises: When operating car rental business, it is necessary to determine the payable VAT rate according to the services provided (whether drivers are equipped or not), and keep clear accounting records to ensure accurate tax returns.

For individuals: if you earn income when renting a car, you need to understand and abide by the relevant provisions of personal income tax to ensure that you pay taxes on time and in full.

To sum up, car rental income needs to be taxed according to law in China, and the specific tax rate and tax obligation will vary according to the taxpayer (company or individual) and the type of service provided (whether drivers are equipped or not).

Legal basis:

Measures for the implementation of the pilot reform of business tax to value-added tax

Article 12

VAT rate:

(1) provides tangible movable property leasing services at the tax rate of 17%.

(2) Providing transportation services and postal services at the tax rate of 1 1%.

(3) Providing modern service industry services (except tangible movable property leasing services) with a tax rate of 6%.

(4) Taxable services stipulated by the Ministry of Finance and State Taxation Administration of The People's Republic of China, the tax rate is zero.

Article 13

The rate of VAT collection is 3%.