After the tax-to-VAT reform, will the tax rate for machinery rental fees be 6% or 17%?

The VAT rate for providing leasing services of tangible personal property is 17%.

Extended information

With the "Notice of the Ministry of Finance and the State Administration of Taxation on launching a nationwide pilot tax policy for replacing business tax with value-added tax in the transportation industry and some modern service industries" (Finance and Taxation [2013] No. 37), a new round of "business tax to value-added tax" pilot program will be expanded from some provinces and cities to nationwide on August 1.

According to the provisions of Caishui [2013] No. 37, after the "VAT to VAT" reform, the value-added tax rate for providing leasing services of tangible movables (including financial leases and operating leases of tangible movables) is 17%. It is the highest among several tax brackets.

Tangible movable property operating lease refers to a business activity that transfers items, equipment and other tangible movable property to others for use within an agreed period of time without changing the ownership of the leased property. The value-added tax taxable sales amount is obtained from leasing the tangible movable property. The full amount of rental income (including extra expenses).

Reference material: Business tax to value-added tax Baidu Encyclopedia