What is the general rate of new vehicle purchase tax?
3 Answers
New vehicle purchase tax is generally levied at a rate of 7.5%. Definition of vehicle purchase tax: It is a tax levied on entities and individuals who purchase specified vehicles within China. All entities and individuals who acquire vehicles through purchase, import, self-production, gift, award, or other means for personal use should pay the tax at a rate of 10%. However, the tax is not repeatedly levied when the vehicle undergoes ownership transfer until the vehicle is scrapped. Specific calculation method: New vehicle purchase tax amount = vehicle purchase price (tax-inclusive price)/1.17 (VAT rate 17%) x 10% (7.5% under 2017 new regulations). Simply put, divide the vehicle's invoice price by 1.17, then multiply by 7.5% to get the purchase tax amount that consumers should pay next year.
I've purchased several cars before, so I'm quite familiar with the purchase tax. This money is collected by the state, uniformly calculated at 10% of the car's price—listen carefully, not the invoice price! You have to deduct the value-added tax portion first. For example, if you buy a 200,000 yuan car, you need to break down the price into the tax-exclusive part, which is basically 200,000 divided by 1.13, approximately 177,000 yuan, then multiply by 10%, resulting in 17,700 yuan. However, there are quite a few exceptions. For instance, electric vehicles are currently exempt from purchase tax until the end of this year, and some small-displacement cars can get a half-price discount. No matter how hard you bargain, it's useless—the tax bureau only recognizes the minimum price in their system. Even if the invoice is issued lower, they still tax based on the registered price. Last time I helped a relative pick up a car, the 4S store deliberately issued a lower invoice price, but there was a same model in the tax system with fewer discounts, so they ended up paying an extra 3,000 yuan. Before picking up the car, it's best to have the salesperson check the local tax base.
Just like how we pay taxes when buying groceries, purchasing a big-ticket item like a car also requires paying a purchase tax. It's directly calculated as 10% of the car's price, but the 13% VAT is deducted first. Simply put, it's the net car price divided by 11.3. Last month, my daughter bought a sedan for 150,000 yuan and ended up paying 13,274 yuan in purchase tax. Now, new energy vehicles are hassle-free—green-plate cars don’t have to pay this tax. If you buy a fuel-powered car with an engine below 1.6 liters, you can even enjoy a half-price discount, saving you thousands. However, don’t think about underreporting the invoice price with the 4S dealership to evade taxes—the tax system has a minimum taxable standard for each car model. It’s advisable to check the local vehicle purchase tax office’s standard levy price before paying the deposit.
