What Taxes Are Paid When Buying a Car?

[VanMatteo]

Taxes to be paid when buying a car include consumption tax, value-added tax, purchase tax, and vehicle and vessel tax. Here is a partial introduction to the taxes paid when buying a car: 1. Consumption Tax: The purchase tax often mentioned when buying a car is actually an extra-price tax, while in reality, automobile manufacturers also have to pay taxes when producing cars, including the consumption tax, which is an intra-price tax. The automobile consumption tax is a new tax category established during the national tax system reform in 1994 and was included in the "Provisional Regulations of the People's Republic of China on Consumption Tax" implemented on January 1, 1994. For passenger cars, three tax rates are set based on different vehicle types and engine displacements, and this tax is levied on manufacturers. 2. Value-Added Tax: The current value-added tax system is based on the "Provisional Regulations of the People's Republic of China on Value-Added Tax" (State Council Order No. 134) promulgated by the State Council on December 13, 1993. Value-added tax refers to a turnover tax levied based on the value-added amount generated during the circulation of goods (including taxable services). Selling goods or providing processing, repair, and replacement services, as well as importing goods and providing tangible movable property leasing services, are subject to a 17% tax rate, which applies to automobile sales.

[VonRuth]

I just bought a new car recently, and the tax part needs careful explanation. Mainly, there's the vehicle purchase tax, calculated at 10% of the invoice price. For example, a car priced at 150,000 yuan would incur a 15,000 yuan tax. Additionally, the car price includes value-added tax (VAT), currently at 13%, which is already included in the total price and doesn't require extra payment. New energy vehicles may be exempt from taxes or eligible for discounts, so it's important to clarify with the salesperson when purchasing. There are also some additional taxes like urban maintenance and construction tax, which aren't much but shouldn't be overlooked. I recommend budgeting before picking up the car, as the tax amount is significant. Don't wait until the license plate registration to scramble around. Used cars have lower taxes, but new cars are more reliable. Last month, I felt quite the pressure when paying the tax, so I suggest preparing cash or considering installment payments to ease the burden.

[VonSteven]

Our family is considering replacing our household car, and taxes have a significant impact on our decision. A 10% purchase tax is required based on the car's price—for example, choosing an economy car priced at 100,000 yuan means paying 10,000 yuan in tax. The value-added tax (VAT) accounts for 13% of the car's price and is included in the total cost at purchase. Local governments may impose additional taxes like education surcharges or environmental taxes, which, though small, add up to a considerable expense. To save money, consider opting for a small-displacement or new energy vehicle, as these attract much lower taxes. Always ask the 4S dealership for a detailed breakdown before purchasing. After taxes, don’t forget to budget for insurance before hitting the road. Last time we bought a car, taxes took up nearly 10% of our budget, so it’s wise to research subsidy policies to save some money.

[MorganAnn]

With extensive car-buying experience, the taxes involved are essentially the purchase tax and VAT. The purchase tax accounts for 10% of the invoice price and is collected directly by the tax bureau. The 13% VAT is included in the car price. Key points: New cars with larger engine displacements have higher tax rates; opting for new energy vehicles can save on taxes. Prepare the tax money early to avoid delays in license plate registration, while other fees like insurance are calculated separately. Every time I buy, I first check the local tax policies to save wherever possible.

[AbigailFitz]

As someone who frequently arranges company vehicles, taxes must be accounted for: the 10% purchase tax is a fixed expense, and the car price includes 13% VAT. Opt for smaller displacement or electric vehicles to reduce taxes, as local surcharges are minimal and can be ignored. When purchasing, request a detailed invoice from the dealer—post-tax costs plus insurance constitute the complete expenditure. It's advisable to negotiate the car price to indirectly save on taxes.

[August]

Just graduated and buying a commuter car, it's only reassuring when you've saved enough for the taxes. The 10% purchase tax is directly deducted from the car price, for example, an 80,000 yuan car requires an 8,000 yuan tax. The value-added tax is about 13% included in the total price. New energy vehicles have less or no tax, while used cars have lower taxes but require caution. After paying taxes, don't forget about licensing and insurance, and leave some room in your budget. I estimate taxes account for over 10% of the total expenses, so choosing an economical model can help reduce the pressure.