The tax rate involved in equipment leasing depends mainly on the region and the type of lease. In the region without the implementation of the camp transformation, equipment leasing is calculated according to the business tax rate of 5%. While in the areas where the change in tax rate has been implemented, a 17% VAT rate applies to leasing equipment for general taxpayers, which can be offset against the VAT on the purchase of the equipment, and 3% for small-scale taxpayers. An additional 7 percent city construction tax, 3 percent education surcharge and 2 percent local education surcharge are also levied in places such as Beijing.
Equipment leasing is a kind of right-to-use exchange, where the user unit obtains the right to use the equipment during the lease period by paying rent, and ownership is not transferred. Leasing is divided into operating leases and financial leases. Operating leases are suitable for rapid technological updating, flexible demand for equipment, the tax rate is included in the cost of the enterprise, but if the violation of the provisions of the law, may face legal sanctions. Finance leasing is a long-term financing equipment leasing method, the lessor does not bear the responsibility of equipment maintenance, equipment depreciation is included in the cost of the enterprise, while the interest and handling fees in the lease costs can be used as a deduction.
Equipment leasing contracts usually stipulate that the lease term is at least one year, the lessor has the right to own the equipment, the lessee to obtain the right to use. The lessee is required to pay the rent on a regular basis, enjoy the right to use the equipment, and at the same time, bear the corresponding responsibilities during the lease.