Is There Purchase Tax for Hybrid Vehicles?

[DeKai]

Hybrid vehicles are exempt from purchase tax, according to the national regulations on new energy vehicles, which enjoy the policy of exemption from vehicle purchase tax. Here is the relevant information: The meaning of vehicle purchase tax: Vehicle purchase tax is a tax levied on units and individuals who purchase specified vehicles within the country, evolved from the vehicle purchase surcharge. The calculation method of purchase tax: Vehicle purchase tax is calculated based on the ad valorem rate method, and the formula is: Tax payable = Taxable price × Tax rate. If the consumer buys a domestic private car, the taxable price is the total price and additional fees paid to the dealer, excluding the value-added tax (VAT rate of 13%). Since the purchase price in the special invoice for motor vehicle sales includes VAT, the 13% VAT must be deducted first when calculating the vehicle purchase tax, i.e., the taxable price for vehicle purchase tax = Invoice price ÷ 1.13, and then the vehicle purchase tax is calculated at a rate of 10%.

[LukeRose]

When it comes to purchase tax for hybrid vehicles, it depends on the specific type. Currently, the government has very friendly policies for new energy vehicles. Plug-in hybrids and range-extended electric vehicles (those that can be charged) are fully exempt from purchase tax, and this policy is valid until the end of 2025. For example, the plug-in hybrid I just bought, which cost 300,000 yuan, saved me nearly 30,000 yuan in taxes—equivalent to getting a premium upgrade package for free. However, it's important to note that conventional hybrid vehicles (like Toyota's dual-engine models) don’t qualify for this exemption since they can’t be externally charged. Before buying, make sure to check the vehicle’s category in the MIIT’s new energy catalog or simply verify if it qualifies for a green license plate.

[BrandonFitz]

I was also confused about the purchase tax before. Now buying a hybrid is actually a great deal, especially PHEVs (plug-in hybrids) which are exempt from purchase tax—the money saved is enough for two years of fuel. For example, if you're eyeing that BYD DM-i with an invoice price of 210,000 RMB, the purchase tax would normally be 18,000 RMB, but with the policy exemption, it's like the manufacturer is giving you a discount. However, regular HEVs (hybrid electric vehicles) still have to pay the full 10% tax, mainly depending on whether the vehicle's certification marks it as 'new energy.' I suggest you ask the dealer to specify who bears the tax in the contract when buying a car—a friend of mine once ran into a dispute over whether the car price included tax or not.

[OAustin]

Hybrid vehicle purchase tax varies by type: plug-in hybrids/extended-range EVs with charging capability enjoy 0% tax rate, while conventional hybrids remain at 10%. Two key criteria determine eligibility: pure electric range exceeding 43km and battery energy density meeting standards. For example, the Li Auto L9 extended-range EV qualifies as a new energy vehicle with tax exemption, whereas the Lexus ES300h hybrid still requires tax payment despite its fuel efficiency. Last year when I accompanied a colleague for vehicle pickup, the dealership assisted with tax exemption documentation - presenting the vehicle conformity certificate and invoice at the tax office completed the tax exemption certification within half an hour.

[DelJames]

The vehicle purchase tax depends on the license plate color. My neighbor just picked up a hybrid CR-V last week, and since it qualifies for a green plate (new energy plate), they didn't pay a single cent in purchase tax. However, a colleague who bought a hybrid Camry with a blue plate still paid 10% of the car's price, totaling 16,000 yuan in taxes. The hybrid market is quite segmented now, with tax exemption policies mainly favoring plug-in hybrid models. Before purchasing, try the pure electric mode in the car's infotainment system—if it can run dozens of kilometers solely on electricity, it's usually tax-exempt. Consider it the government's way of encouraging us to use clean energy.