Is Tax Required for Personal Second-hand Car Transfer?
1 Answers
According to the relevant regulations of the "Second-hand Car Circulation Management Measures", after the completion of a second-hand car transaction, a unified invoice supervised by the tax authority shall be issued to the current vehicle owner. Except for individuals selling second-hand cars, all other non-individual sellers of second-hand cars must pay value-added tax (VAT). According to the relevant provisions of the "Interim Regulations of the People's Republic of China on Value-added Tax", when non-natural persons sell their used motor vehicles, VAT shall be fully levied starting from September 2010. The specific policies are as follows: 1. For general VAT taxpayers selling their used motor vehicles, if the VAT input tax is not deductible and has not been deducted: VAT shall be levied at a simplified rate of 4% with a half reduction. The calculation formulas for sales amount and tax payable are: Sales amount = Tax-inclusive sales amount / (1+4%) Tax payable = Sales amount * 4% / 2. 2. For general VAT taxpayers selling their used motor vehicles, if the VAT input tax has been deducted: VAT shall be paid at a rate of 17%. The calculation formula for tax payable is: Tax payable = Sales amount × 17%. 3. For small-scale taxpayers (excluding other individuals) selling their used motor vehicles: VAT shall be levied at a reduced rate of 2%.
