Is a purchase tax required when buying a domestically produced car?
4 Answers
Purchasing a domestically produced car requires payment of a purchase tax. Below is detailed information about the vehicle purchase tax: 1. Overview: The purchase tax is a tax levied by tax authorities on the acquisition of specified properties and assets within the taxation framework. The vehicle purchase tax is imposed on entities and individuals purchasing designated vehicles within China, evolving from the vehicle purchase surcharge. 2. Additional Information: Starting from January 1, 2018, the purchase tax rate for consumers buying passenger vehicles with engine displacements of 1.6 liters or below was restored to 10%. Prior to this, the tax rate was 7.5%. For example, purchasing a passenger vehicle priced at 100,000 yuan in 2018 would incur a purchase tax of 8,547 yuan, approximately 2,137 yuan more than the current amount.
I just bought a domestic car and indeed had to pay the purchase tax. This tax is a fee required when purchasing a vehicle, and all new cars—including domestic ones—are subject to approximately 10% of the invoice price. For example, my car was priced at 150,000 yuan. After dividing by 1.17, it came to about 128,000 yuan, and multiplying by 10% resulted in a tax of 12,800 yuan. This payment is made before license plate registration—without it, the DMV won’t issue plates, causing major hassles on the road. Fortunately, new-energy domestic cars may qualify for reductions, and policies keep changing. At the time, I checked the official website and saved a few thousand. Though the tax is annoying, planning your budget in advance or opting for a low-emission vehicle can help cut costs.
The vehicle purchase tax applies to all newly purchased vehicles, including domestic cars. It is a national tax with a standard rate of 10%, calculated based on the vehicle price excluding VAT. I recall the policy states this tax is used to support road construction and traffic management, so every car owner must share this responsibility. When buying domestic cars, it's best to factor this tax into the total cost. Currently, there are incentives for new energy vehicles where the purchase tax may be fully exempted, such as for pure electric domestic models - I personally saved a significant amount by taking advantage of this. Overall, this isn't an avoidable extra fee but a necessary investment ensuring safety and supporting development.
The purchase tax is mandatory, and it applies to all new domestic vehicles when buying. From my personal car-buying experience, the tax is approximately 10% of the car's price, directly added to the total cost. If you purchase a new energy domestic vehicle, such as an electric car, there might be tax reductions or exemptions under current policies, which can save you some money. Additionally, it's advisable to check the tax rate before purchasing to avoid being misled by dealers. Paying the purchase tax is a legal requirement for vehicle registration. Keeping an eye on the latest regulations on government websites can help you find ways to save money.
