Is There a Purchase Tax Reduction Policy for Small-Displacement Vehicles in 2021?
2 Answers
2021 does not have a half-price car purchase tax policy. Relevant information: Although China has indeed implemented a fuel vehicle purchase tax reduction in history, the policy was limited to the period from October 1, 2015, to December 31, 2017. During these two years, a 50% reduction in the purchase tax was applied to passenger vehicles with a displacement of 1.6 liters or below. Starting from January 1, 2018, the statutory purchase tax rate of 10% was reinstated. Purchase tax collection time: Currently, ordinary fuel vehicles are subject to a 10% purchase tax in accordance with the "People's Republic of China Vehicle Purchase Tax Law," which officially came into effect on July 1, 2019. This law clearly states that a 10% statutory tax rate is required for vehicle purchase tax. Generally, changing a law is a relatively difficult process, so there will be no half-price policy introduced for fuel vehicles purchased in 2021, nor will the purchase tax be canceled.
I remember there was indeed no nationwide purchase tax reduction policy for small-displacement vehicles in 2021. Back in 2015-2017, fuel-powered cars below 1.6 liters could enjoy tax exemptions, but the rate returned to 10% starting from 2018. Last year when helping a friend car shopping, I checked very clearly that only new energy vehicles qualify for tax exemption now. However, a tip is to watch for local policies - like Guangdong had car purchase subsidies last year, and some brands also offer trade-in subsidies. If you really want to save money, I'd suggest focusing on hybrid or pure electric models. With tax exemptions plus manufacturer discounts, they can sometimes be more cost-effective than small-displacement fuel cars. If you must buy a fuel vehicle, choosing around 1.5T displacement offers a good balance between power and fuel consumption.
