How to Calculate the Purchase Tax for Sedans?

[VanWyatt]

Vehicle purchase tax is calculated based on the ad valorem rate method, with the formula being: Tax Payable = Taxable Price × Tax Rate. For consumers purchasing domestic private vehicles, the taxable price includes all payments made to the dealer and additional fees, excluding the value-added tax (VAT). First, the 17% VAT is deducted, meaning the taxable price for vehicle purchase tax = Invoice Price ÷ 1.17. Then, the vehicle purchase tax is levied at a 10% rate.