Do Sedans Need to Pay Consumption Tax?
2 Answers
Automobile sales companies need to pay consumption tax when selling ultra-luxury sedans, while other vehicles are exempt from this tax. Additional Consumption Tax Calculation: To guide rational consumption and promote energy conservation and emission reduction, with the approval of the State Council, an additional consumption tax is levied on ultra-luxury sedans. For ultra-luxury sedans, in addition to the current consumption tax rate applied at the production (import) stage, an additional consumption tax is imposed at the retail stage, with a rate of 10%. The formula for calculating the consumption tax payable at the retail stage for ultra-luxury sedans is: Tax Payable = Retail Sales Amount (excluding VAT) × Retail Stage Tax Rate. Direct Sales Consumption Tax Calculation: For ultra-luxury sedans directly sold to consumers by domestic automobile manufacturers, the consumption tax rate is calculated by summing the production stage tax rate and the retail stage tax rate. The formula for calculating the consumption tax payable is: Tax Payable = Sales Amount × (Production Stage Tax Rate + Retail Stage Tax Rate).
I remember encountering this issue when I bought a car last time. As ordinary consumers, we do indeed pay a consumption tax when purchasing a passenger car, but this tax isn't paid directly to the government. It's already included in the vehicle price—meaning manufacturers or importers have deducted it when selling the car, and the total price we pay covers this portion. In China, the consumption tax is levied on specific goods. For passenger cars, the tax rate is determined by engine displacement. For example, a 1.5L engine has a rate of around 9%, and the higher the displacement, the higher the rate. Besides the consumption tax, there's also a vehicle purchase tax, which is paid separately after buying the car, usually around 10% of the vehicle price, and you have to handle it yourself at the tax office. After understanding these, I set aside a bit more in my budget to avoid last-minute hassles when purchasing. From an economic perspective, these taxes are implemented by the state to regulate consumption and promote environmental protection, encouraging people to buy energy-efficient vehicles while also increasing government revenue. However, for ordinary people, it raises the cost of buying a car, so proper planning is essential.
