What is Vehicle Purchase Tax?
1 Answers
Vehicle purchase tax refers to a tax levied on units and individuals purchasing specified vehicles. Below are specific introductions to vehicle taxes: 1. Consumption Tax: Automobile consumption tax is a newly established tax category in China's 1994 tax reform, included in the "Provisional Regulations of the People's Republic of China on Consumption Tax" effective from January 1, 1994. For passenger cars, three tax rates are set based on different engine displacements, levied on manufacturers. 2. Value-Added Tax (VAT): VAT is a turnover tax levied on the value added during the circulation of goods (including taxable services). It applies to the sale of goods, provision of processing, repair, and replacement services, import of goods, and provision of tangible movable property leasing services, with a rate of 17%. Automobile sales fall under this category. 3. Purchase Tax: A 10% vehicle purchase tax is levied on the purchase of passenger vehicles with an engine displacement of 1.6 liters or below. New vehicle purchase tax = new vehicle price (including tax) ÷ 1.17 (VAT rate of 17%) x purchase tax rate. 4. Vehicle and Vessel Tax: Vehicle and vessel usage tax is a usage behavior tax calculated and levied based on the type (such as motor vehicles, non-motor vehicles, passenger cars, cargo trucks, etc.), tonnage, and specified tax amount for vehicles driving on public roads and vessels navigating domestic rivers, lakes, or territorial ports.
