2021 New Policy on Vehicle Purchase Tax for Passenger Cars?

[August]

Here is the relevant information on the 2021 new policy for passenger car purchase tax: According to the "Announcement by the Ministry of Finance, State Taxation Administration, and Ministry of Industry and Information Technology on Policies Regarding Exemption of Vehicle Purchase Tax for New Energy Vehicles" (Ministry of Finance Announcement No. 21 of 2020), the following new measures can be summarized: From January 1, 2021, to December 31, 2022, the purchase of new energy vehicles will be exempt from vehicle purchase tax. New energy vehicles exempt from vehicle purchase tax include pure electric vehicles, plug-in hybrid (including range-extended) vehicles, and fuel cell vehicles. The exemption of vehicle purchase tax for new energy vehicles will be managed through the "Catalog of New Energy Vehicle Models Exempt from Vehicle Purchase Tax" (hereinafter referred to as the "Catalog"). The purchase date for tax-exempt models listed in the Catalog is the date indicated on the unified sales invoice (or valid certificate) of the motor vehicle. For new energy vehicles already included in the Catalog, relevant automakers and new energy vehicle dealers need to complete the necessary tax-exempt identification procedures to qualify for vehicle purchase tax exemption. Automakers must ensure that the vehicle electronic information matches the vehicle product. Any loss of vehicle purchase tax revenue due to the provision of false information or materials will be handled in accordance with the "Law of the People's Republic of China on the Administration of Tax Collection" and its implementing regulations. Staff involved in the management of the Catalog, review of tax-exempt identification, and processing of tax-exempt procedures who engage in illegal or disciplinary actions such as abuse of power, dereliction of duty, or malpractice will be held accountable under relevant national laws, and cases suspected of criminal activity will be transferred to judicial authorities. This announcement came into effect on January 1, 2021. The exemption policy for new energy vehicles listed in the Catalog before December 31, 2020, remains valid.