Is the Vehicle Purchase Tax Calculated Based on the Ex-factory Price?
2 Answers
Vehicle purchase tax is not calculated based on the ex-factory price, but rather on the actual transaction price. Here is relevant information about vehicle purchase tax: 1. Relevant regulations: According to the new "Vehicle Purchase Tax Law of the People's Republic of China," the vehicle purchase tax rate is 10%, the value-added tax rate is 13%, and the taxable price is the total amount actually paid by the taxpayer to the seller (excluding value-added tax). 2. Definition: Vehicle purchase tax is a tax levied on units and individuals who purchase specified vehicles within China, evolving from the vehicle purchase surcharge. The current basic regulations of the vehicle purchase tax law are implemented from January 1, 2001, under the "Interim Regulations on Vehicle Purchase Tax of the People's Republic of China."
When I first bought a new car, I was confused by how the purchase tax was calculated because it wasn't directly based on the sticker price. In actual car purchases, the calculation basis for the purchase tax is the tax-exclusive price on the invoice, which is usually the sticker price minus the value-added tax (VAT) and then multiplied by the tax rate. For example, the car I bought had a sticker price of 150,000 yuan, but the VAT accounted for 13%, so the taxable price was 150,000 divided by 1.13, approximately 132,700 yuan, and then multiplied by the 10% purchase tax rate, resulting in a tax of 13,270 yuan. The dealer reminded me not to focus solely on negotiating the sticker price, otherwise the total cost could exceed the budget significantly. Now when buying a car, I always calculate the purchase tax into the total cost first to see if my wallet can handle it, otherwise, installment payments might become even more troublesome. Different types of cars don't all have the same tax rates either. For instance, pure electric vehicles can have their purchase tax reduced or exempted, and the money saved could cover several fuel refills. Before buying a car, it's best to inquire at multiple dealerships and compare invoice details to avoid being blindsided by additional costs.
