Is the Vehicle and Vessel Tax Related to Engine Displacement?
1 Answers
Vehicle and vessel tax is related to engine displacement, but it does not have a significant impact on the amount of tax payable. The vehicle and vessel tax collection standard is a measure of how much tax is levied. Since the vehicle and vessel tax is a local tax, in addition to complying with the "Interim Regulations of the People's Republic of China on Vehicle and Vessel Tax" and other regulations, the collection standard should also be determined according to the specific management measures formulated by local tax bureaus. Vehicle owners can pay the vehicle and vessel tax at the same time as purchasing compulsory traffic insurance. For passenger vehicles with an engine displacement of 1 liter or less, the vehicle and vessel tax should be levied according to the tax standard for mini passenger vehicles. Additionally, energy-saving vehicles are subject to a 50% reduction in vehicle and vessel tax, while new energy vehicles and vessels are exempt from the tax. The "Vehicle and Vessel Tax" refers to a property tax levied on vehicles and vessels registered with public security, transportation, agriculture, fisheries, military, and other administrative departments in China, calculated based on their type, prescribed tax basis, and annual tax standards. Since July 1, 2007, vehicle owners have been required to pay the vehicle and vessel tax when purchasing compulsory traffic insurance. Starting from August 1, 2018, energy-saving and emission-reducing vehicles that meet the standards are subject to a 50% reduction in vehicle and vessel tax.
