What is the purpose of vehicle and vessel tax?
1 Answers
Vehicle and vessel tax refers to a type of tax that owners or managers of vehicles and vessels within the territory of the People's Republic of China are required to pay in accordance with the Vehicle and Vessel Tax Law of the People's Republic of China. Taxes on vehicles: Motor vehicles and vessels that are required by law to be registered with the vehicle and vessel management authorities; those that are not required by law to be registered. Purchase tax The vehicle purchase tax is a tax levied on units and individuals who purchase specified vehicles within China, evolving from the vehicle purchase surcharge. The purchase tax rate is 10% of the vehicle's selling price (excluding tax). Value-added tax (VAT) The VAT rate for passenger cars in China is 13%. The VAT payable is calculated by multiplying the invoice amount by the VAT rate, meaning the VAT is already included in the payment for the vehicle. Consumption tax The consumption tax is paid by the vehicle manufacturer, not directly by the consumer. Before the vehicle leaves the factory, the manufacturer has already paid the consumption tax. Different engine displacements correspond to different tax rates, generally following the principle that the larger the displacement, the higher the consumption tax. Taxes on vessels: Vessels include motorized vessels and non-motorized vessels. Motorized vessels refer to those powered by fuel or other energy sources, such as passenger ships, cargo ships, and hovercrafts; non-motorized vessels refer to those powered by human or other forces, such as wooden boats, sailboats, and sampans. Vehicle and vessel tax is a property tax calculated and levied based on the type of vehicle or vessel that is required by law to be registered with public security, transportation, agriculture, fisheries, military, and other management authorities within China, according to specified tax bases and annual tax rates. Starting from July 1, 2007, vehicle owners are required to pay the vehicle and vessel tax when purchasing compulsory traffic insurance.
