What taxes are required when buying a car?
3 Answers
When purchasing a car, you generally need to pay the vehicle purchase tax and the vehicle and vessel usage tax. Below is relevant information about the vehicle purchase tax: 1. Purpose: To reasonably raise construction funds, standardize government behavior, and adjust income disparities. It also assists in combating smuggling and safeguarding national interests. 2. Characteristics: The tax has a single scope of collection, a single collection link, a single tax rate, and a single collection method. It is levied as an additional charge outside the price, and the tax burden is not transferred. By imposing the vehicle purchase tax, the state participates in the redistribution of national income, effectively converting part of the consumption fund into fiscal funds to raise more capital for the state, meeting the needs of state functions.
When buying a car, I realized that taxes can't be ignored. The main one is the purchase tax, commonly known as the 'big car tax,' which is about 10% of the car's price and must be paid on time after the invoice is issued. VAT is usually included in the total price, but you should confirm whether the dealer has covered it all. When registering the car, there are also the vehicle and vessel tax and license plate fees—the former is based on engine displacement and the year, with lower rates for small-displacement cars, saving you a few hundred bucks. Additionally, if you buy an imported car, the taxes are higher and more varied, including tariffs and such. After purchasing, you'll need to pay an annual vehicle usage tax or fuel tax. I think it's wise to budget an extra 15% of the total price for these taxes and fees, and it's best to clarify all the details in advance to avoid future hassles. Choosing a new energy vehicle like an electric car can bring more tax exemptions and incentives in some areas, saving you more in the long run. In short, don’t just focus on the car price—the taxes and fees add up to quite a bit.
Having been in the automotive industry for a long time, I'm well-versed in car purchase taxes. The core tax is the purchase tax, which is a fixed 10% levied on the ex-factory price of the car—don't let anyone fool you about that. The 17% VAT is usually included in the listed price, but it's best to check the full breakdown. The registration process includes the vehicle and vessel tax, with rates ranging from a few hundred to several thousand depending on the engine displacement and the age of the car; cars with engines below 1.6 liters have lower taxes, making small sedans quite cost-effective. Regional policies vary, with some areas adding environmental surcharges. Before buying, check government websites or professional forums to stay updated on the latest tax laws. Opting for a fuel-efficient model not only saves on taxes but also reduces fuel taxes down the line. I've also noticed that the taxes on used cars are simpler, with transfer fees being just a few hundred yuan. Planning ahead can save you a lot of hassle.
