Do Used Cars Not Require Purchase Tax?
3 Answers
Used cars do not require payment of purchase tax. Specific explanations are as follows: A vehicle only needs to pay purchase tax once, generally when purchasing a new car. However, if the purchase tax was not paid when the new car was purchased, the new owner will need to make up the purchase tax portion after the used car transaction. The "Vehicle Purchase Tax Law of the People's Republic of China" stipulates: Vehicle purchase tax is levied once. Vehicles that have already paid purchase tax will not be subject to purchase tax again. Therefore, buying a used car that has already paid purchase tax does not require paying it again. However, in reality, some vehicle models can pay half or be exempt from purchase tax when purchasing a new car. For these types of cars, the purchase tax must be made up when selling them as used cars.
When I helped a friend buy a used car before, I specifically researched the purchase tax issue. Simply put, used cars generally don’t require paying the purchase tax again because the first owner already paid it when buying the car. According to national regulations, the new car purchase tax is only collected once, so during the transfer, we only need to focus on the car price and transfer fees. However, it’s crucial to carefully check the original owner’s tax payment certificate—if the car hasn’t been taxed before or the tax certificate is lost, you might actually need to pay the tax. Additionally, for particularly cheap imported or luxury cars where the price is below the minimum taxable value in the tax system, the tax authority might still levy tax based on the system’s valuation. I’ve seen this special case happen twice.
The tax issues during the transfer of used cars should be explained from the principles of tax law. The essence of the vehicle purchase tax is a circulation tax, with the principle that the same commodity is only taxed once. Currently, Article 9 of the Vehicle Purchase Tax Law clearly states that 'vehicles already taxed shall not be taxed again,' so registering a used car only requires a few hundred yuan in administrative fees. However, there are two exceptions worth noting: one is when tax-exempt vehicles (such as early new energy vehicles) are transferred to ordinary consumers, tax may need to be paid; the other is the customs duty payable when customs-supervised vehicles are converted to civilian use. In both cases, it is essentially equivalent to the first-time taxation rather than double taxation.
