Should Used Cars Still Pay Purchase Tax?

[McGabriella]

Automobiles only require payment of purchase tax once, generally at the time of purchasing a new car. In other words, used cars do not need to pay purchase tax. However, if purchase tax was not paid when the car was new, the new owner will need to make up the purchase tax portion after the used car transaction. Below is an introduction to vehicle purchase tax: 1. Calculation method: Vehicle purchase tax payable = taxable price × 10% (5% reduction for passenger vehicles with 1.6 liters or below displacement). 2. Information 1: For taxpayers purchasing self-use taxable vehicles, the taxable price is the total price and additional fees paid by the taxpayer to the seller for the taxable vehicle, excluding VAT. That is, the total amount on the "Unified Invoice for Motor Vehicle Sales" you obtained divided by (1+17%) serves as the taxable basis, multiplied by 10% (5% reduction for passenger vehicles with 1.6 liters or below displacement) to determine the payable vehicle purchase tax. 3. Information 2: For taxpayers importing self-use vehicles, the taxable price calculation formula is: taxable price = customs duty-paid price + customs duty + consumption tax. 4. Information 4: For vehicles obtained by taxpayers through self-production, gifts, awards, or other means for self-use, the taxable basis is determined by the vehicle purchase office with reference to the minimum taxable price for taxable vehicles approved by the State Administration of Taxation. For self-purchased or imported self-use vehicles, if the taxpayer's declared taxable price is lower than the minimum taxable price for similar taxable vehicles without justifiable reason, the taxable basis is the minimum taxable price for taxable vehicles approved by the State Administration of Taxation. The minimum taxable price refers to the vehicle purchase tax taxable price determined by the State Administration of Taxation based on vehicle price information provided by vehicle manufacturers and with reference to the average market transaction price. A declared taxable price lower than the minimum taxable price for similar taxable vehicles without justifiable reason means the taxpayer's declared vehicle taxable price is lower than the factory price or the taxable price of imported self-use vehicles. 5. Information 5: For special circumstances, the taxable basis is determined as follows: for imported used cars, vehicles damaged due to force majeure, vehicles in inventory for over three years, test vehicles driven over 80,000 kilometers, and other vehicles specified by the State Administration of Taxation, the competent tax authority determines the taxable price based on the price stated in the "Unified Invoice for Motor Vehicle Sales" or valid certificates provided by the taxpayer.