What taxes need to be paid for a new car?
3 Answers
New cars require the following taxes: 1. Purchase tax: Small-displacement vehicles (below 1.6L) enjoy a 50% reduction in purchase tax; large-displacement vehicles (above 1.8L) receive no discount. 2. Vehicle purchase tax: The tax amount is calculated using the ad valorem rate method. The calculation formula is: Taxable amount = Taxable price × Tax rate. If the consumer purchases a domestic private vehicle, the taxable price includes all payments made to the dealer and additional fees, excluding VAT (17% rate). Since the purchase price on the special motor vehicle sales invoice already includes VAT, the 17% VAT must first be deducted when calculating the vehicle purchase tax. That is: Vehicle purchase tax taxable price = Invoice price ÷ 1.17, then the vehicle purchase tax is calculated at a 10% rate.
I just went through the process of paying taxes when buying a car, so here's some firsthand experience. For a new car, you mainly need to pay two types of taxes: vehicle purchase tax and vehicle and vessel tax. The vehicle purchase tax is a one-time payment made at the time of purchase, and the calculation is straightforward—10% of the invoice price. For example, a car priced at 200,000 yuan will require a 20,000 yuan tax payment. The vehicle and vessel tax is an annual fee, and the amount depends on the engine displacement—the larger the displacement, the higher the tax. A 1.6L car might cost a few hundred yuan, while a 2.0T could be over a thousand. Don’t forget, the car price already includes value-added tax (VAT), around 17%, which isn’t an extra payment but still counts as part of the tax burden. These taxes add up to a significant amount, so don’t overlook them when budgeting to avoid sticker shock. Also, you can’t register and drive the car until the taxes are paid. A tip: buying a new energy vehicle qualifies for a purchase tax reduction, saving money and being eco-friendly. Overall, these taxes are collected by the government for road construction—perfectly legal and reasonable, so consider it a contribution to public infrastructure. Just remember, dealers might handle the tax payment during delivery, but always double-check the invoice to avoid overpaying—otherwise, it’s not worth the hassle.
When it comes to new car taxes, I know a thing or two. There are basically two major ones: the vehicle purchase tax is 10% of the car's price, and it's only considered fully settled after payment; the vehicle and vessel tax is an annual tax, with fees determined by engine displacement—small cars cost a few hundred, while larger ones exceed a thousand. The value-added tax is already included in the car price, so no need to worry about it. The key point is that luxury cars come with shockingly high taxes—for example, a 300,000 RMB car incurs a 30,000 RMB purchase tax. I also know that new energy vehicles enjoy tax reductions, with the purchase tax basically waived and the vehicle and vessel tax discounted, making them quite cost-effective. When budgeting, don’t just focus on the price—calculate the taxes to avoid overspending. Additionally, when applying for a license plate, you’ll need to handle the tax documents at the same time, which can delay driving if not done promptly, so beginners should remember to start early. Also worth emphasizing: tax policies can change occasionally, like big cities possibly adding environmental taxes, so check the details to avoid trouble. In short, the dream of driving is beautiful, but the reality of taxes must be faced—choosing the right model to save some money is the way to go.
