What taxes are required when purchasing an imported car?
2 Answers
Taxes for imported cars include customs duty, with rates ranging from 25% to 50%; consumption tax, with rates ranging from 10% to 45%; and value-added tax at 17%. Below is a detailed introduction to the taxes and fees for imported cars: Customs Duty: The higher the customs duty, the weaker the price competitiveness of imported goods in the domestic market. In China, the customs duty is 25%, meaning an additional 25% is added to the import cost. Consumption Tax: Currently, the domestic consumption tax is divided into 8 tiers, generally below 40%, and is proportional to the displacement tax, hence it is also called the displacement tax. Both domestically produced and imported cars are subject to consumption tax by manufacturers. However, imported cars are additionally subject to customs duty, and under this compounding effect, the impact of the consumption tax rate on the total tax rate is further amplified.
Last year I bought an imported German car and realized the taxes were quite substantial. Mainly divided into several types: import duty is typically around 20% of the car's price, varying depending on the origin (US and European models have different rates); VAT at 13%, which is the standard tax rate for goods; consumption tax based on engine displacement—lower rates like 5% for small engines (e.g., 1.5L) and up to 25% for larger ones (e.g., 3.0L); plus a 10% purchase tax calculated on the pre-tax vehicle price. In total, taxes on a 300,000 RMB car can add 60,000-80,000 RMB, nearly one-third of the total cost. Additional expenses include registration fees and insurance. I recommend checking local tax rates and budgeting carefully before buying to avoid being short on funds like I was.
