How to Calculate the Purchase Tax for Used Cars?

1 Answers
BriannaFitz
07/29/25 10:27am
Vehicle purchase tax is calculated based on the ad valorem rate method. The calculation formula is: Taxable Amount = Taxable Price × Tax Rate. For example, if a consumer buys a domestic private car, the taxable price is the total payment made to the dealer plus any additional fees, excluding the value-added tax (VAT). First, deduct the 17% VAT, meaning the taxable price for vehicle purchase tax = invoice price ÷ 1.17. Then, apply the 10% tax rate to calculate the vehicle purchase tax.
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