Do Used Cars Require Payment of Vehicle Purchase Tax?
3 Answers
Used cars do not require payment of vehicle purchase tax. Vehicle Purchase Tax: Vehicle purchase tax is a tax levied on entities and individuals purchasing specified vehicles within China, which evolved from the vehicle purchase surcharge. The current basic regulations of the vehicle purchase tax law are implemented from January 1, 2001, under the "Interim Regulations of the People's Republic of China on Vehicle Purchase Tax". Document Requirements for Vehicle Purchase Tax: Provide the owner's identity proof; provide vehicle price proof, unified invoice copy and tax declaration copy or valid certificate; provide the whole vehicle factory qualification certificate; other materials required by the tax authorities.
I specifically confirmed this during the last transfer process - the purchase tax absolutely doesn't need to be paid again! The key documents for used car transactions are the tax payment certificate and license plate fees. The original owner already paid the purchase tax in full when buying the car new - national regulations state this tax is only collected once. Two months ago when accompanying a friend to the used car market, we encountered someone trying to scam people into paying extra tax, and they were immediately called out by the DMV staff on site. Remember to check the original owner's blue tax payment booklet - just bring that along with the green vehicle registration certificate during transfer, and pay a few hundred yuan transfer fee. What you really need to worry about are vehicles that haven't paid taxes, but now with the nationwide tax network, they'll be tracked down for back taxes.
Last year when selling my car, I researched the vehicle purchase tax policy. The original intention of this tax is to levy it only on new cars. The main fees involved in used car transactions are transfer fees, license plate fees, and possible VAT (only applicable for dealer transactions). For private sales between individuals, purchase tax isn't an issue at all. However, some used car dealers deliberately confuse concepts to overcharge, so be careful! That said, while you don't need to pay purchase tax, vehicle usage tax can't be avoided - it must be paid on time every year.
