Regardless of the type of business, it cannot be separated from taxation as long as the type and condition of the business meets the provisions of the applicable tax laws.
Like the vehicle rental tax, which has several types of car rental tax imposition, such as vehicle rental income tax and car rental VAT.
Each type of tax has a different rate, including the vehicle rental tax rate.
In order for the car rental business to run smoothly and develop even better, fulfill all tax obligations.
Know the types of vehicle rental VAT and car rental income tax in the vehicle rental business before taking care of the taxes.
The vehicle rental business is also an object of Value Added Tax (VAT).
Indeed, in Article 4A paragraph 3 of the VAT Law No. 42 of 2009 stated that public transportation services on land and in water as well as domestic air transportation services are an integral part of foreign air transportation services.
However, it should be understood that what is meant by public transportation above is specifically for yellow license plates. As for vehicles with black plates that are used for business, the transaction is subject to vehicle rental VAT.
The VAT rate for vehicle rental is 11% starting April 2022 as the latest value added tax rate stipulated in the HPP Law.
How to calculate VAT for vehicle rental?
For example, PT BUK rents a vehicle for corporate needs from PT BBB with a daily rental price of IDR 1,000,000 million including VAT.
So, the calculation is to look for a Tax Imposition Basis (DPP) first because the vehicle rental fee includes VAT.
The method;
DPP = 100/111 x 1,000,000 = IDR 900,900.9
Vehicle rental VAT = 11% 900,900.9 = 99,099.099
The following is a case example of how to calculate VAT on vehicle rental:
BBB is a treasurer taxpayer who pays a work visit and rents a vehicle from PT BUM with a rental price of IDR 2,500,000 per day, including VAT. Rent a vehicle for 3 days.
Then, the calculation of the vehicle rental VAT is:
– Vehicle rental rates per day = IDR 2,500,000
– Vehicle rental rates for 3 days = IDR 2,500,000 x 3 days = IDR 7,500,000
Basic Tax Imposition (DPP):
= 100/111 x IDR 7,500,000
= IDR 6,756,756.76
VAT on Vehicle Rental:
= VAT rate x DPP
= 11% x IDR 6,756,756.76
= IDR 743,243.24
So, the amount of VAT on vehicle rental that must be paid by the KLP Treasurer to PT BUM is IDR 743,243.76
After knowing the Tax Base (DPP) and VAT on vehicle rental, then PT BUM as the party providing vehicle rental services will be deducted Article 23 Income Tax by the BBB Treasurer.
Here’s how to calculate PPh 23 which must be deducted by the KLP Treasurer when paying the vehicle rental to PT BUM:
Income Tax Article 23 on Vehicle Rental:
= PPh rate 23 x DPP
= 2% x IDR 6,756,756.76
= IDR 135,135.14
What if the party who rents out the vehicle does not have an NPWP?
For those who rent a vehicle without an NPWP, they will be subject to PPh 23 which is higher than the normal PPh article 23 tax rate, from the normal rate of 2% to double.
Example,
1. PT PYU pays a rental vehicle with a rental value of Rp. 5,000,000 to Mr. Janu.
Mr. Janu has a NPWP, so Article 23 PPh that PT PYU must deduct is 2% x IDR 5,000,000 = IDR 100,000.
2. PT PYU paid a vehicle rental with a value of Rp. 5,000,000 to Mr. Janu, but Mr. Janu did not have a NPWP, so the PPh 23 that PT PYU had to deduct was 200% x 2% x Rp. 5,000,000 = Rp. 200,000.
The condition of the party who rents out the vehicle does not have an NPWP is usually the car rental owner who has not registered himself as a Corporate WP.
After knowing the type of tax charged on vehicle rental, the total amount of tax on vehicle rental is:
VAT = IDR 743,243.24
PPh 23 = IDR 135,135.14
The total tax on vehicle rental is IDR 878,378.37