How is the Luxury Car Tax Calculated?
2 Answers
For ultra-luxury passenger cars with a retail price of 1.3 million yuan (excluding VAT) or more, an additional 10% consumption tax is levied at the retail stage. The luxury tax is imposed on excessive luxury consumption behaviors that fall into the category of extravagant consumption, enjoyed by a minority, and is beneficial in curbing excessive consumption. Specific details are as follows: 1. Luxury car tax; Implementing a luxury tax is a massive systematic project that requires a thorough evaluation process. Levying taxes on luxury goods and luxury consumption is a good method for reasonably regulating consumption and can, to some extent, address the unfairness in social income distribution. Regarding the proposal to impose luxury goods taxes and luxury taxes, few scholars fully support it, while many hold differing opinions. Luxury behavior itself is neither right nor wrong; whether to restrict a certain luxury behavior depends on two scenarios: one is whether such consumption imposes costs on society, such as excessively consuming scarce non-renewable resources, resulting in waste, or emitting pollution that harms others. In such cases, taxes can be used to impose restrictions, and similar taxes do exist currently; the other scenario is who pays for such consumption. Currently, the rampant public fund consumption involves public officials indulging in luxury at taxpayers' expense.
This luxury tax, I just bought a new car recently and researched it thoroughly. Simply put, if the car price exceeds 1.3 million, you have to pay an additional 10% luxury tax, which is calculated directly on the retail price. For example, my car costs 1.5 million, so the tax would be 150,000. Then add the purchase tax: the invoice price of 1.5 million minus the 13% VAT, making the tax-exclusive price about 1.32 million, multiplied by 10% purchase tax is 132,000. Combined, the total tax is roughly 282,000. When buying a car, check the model’s price tag—if it’s below 1.3 million, this doesn’t apply, so you don’t waste money. I think it’s best to consult the dealer in advance; they can help you budget and avoid overspending. Keep an eye on car price changes or promotions, choose a reasonably priced car, and save this tax money for fuel or maintenance—it’s more cost-effective. Car taxes have a big impact, so don’t rush into buying; doing your homework can save you a lot.
