What taxes are paid when buying a new car?
2 Answers
When purchasing a new car, the following taxes are applicable: 1. Vehicle Purchase Tax: This is mandatory when buying a car, typically at a rate of 10%, and is paid only once per vehicle; 2. Vehicle and Vessel Usage Tax: Generally paid annually when purchasing compulsory traffic insurance for the vehicle; 3. Value-Added Tax (VAT): Levied on the added value of goods during circulation, usually already included in the purchase price; 4. For imported vehicles, a certain amount of customs duty is also required; 5. Consumption Tax: A collective term for taxes imposed on the turnover of consumer goods, currently categorized into different tiers based on engine displacement.
Last time I bought a car, I encountered this issue. The main tax you need to pay when purchasing a new car is the vehicle purchase tax, which is about 10% of the car's price. You can't get your license plate until this tax is paid. I chose a regular fuel-powered car back then, and the salesperson directly told me that this tax wasn't included in the car's price—it had to be paid separately. So, I had to budget for it before signing the contract. If you buy a new energy vehicle, like an electric car or a plug-in hybrid, there are policy benefits now—the purchase tax can be waived. I regret not learning about this earlier, as it could have saved me a significant amount. Additionally, the car price already includes value-added tax (VAT), but unlike the purchase tax, it isn't displayed separately. After buying the car, you also need to pay an annual vehicle and vessel tax, but that's settled during the annual inspection. Overall, when buying a car, you should consider the purchase tax—don’t just focus on the sticker price.
