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At the previous meeting of the State Council, it was clearly pointed out that the policy of subsidy for the purchase of new energy vehicles and exemption from purchase tax would be extended for two years. On April 22, the Ministry of Finance formally issued a notice on the policy of exemption from vehicle purchase tax for new energy vehicles, pointing out that from January 1, 2021 to December 31, 2022, new energy vehicles will be exempted from vehicle purchase tax. New energy vehicles exempt from vehicle purchase tax refer to pure electric vehicles, plug-in hybrid (including incremental) vehicles and fuel cell vehicles.

New energy vehicles exempted from vehicle purchase tax shall be managed through the catalogue of New Energy vehicles exempted from vehicle purchase tax issued by the Ministry of Industry and Information Technology and the State Administration of Taxation (hereinafter referred to as the catalogue), the notice said. From the date of promulgation of the catalogue, the purchase of new energy vehicles listed in the catalogue shall be exempted from vehicle purchase tax; the purchase time shall be the date indicated in the unified invoice (or valid voucher) for motor vehicle sales.

Sales of new energy vehicles in China totaled 114000 in the first quarter of this year, down 56.4 percent from the same period last year. The domestic new energy vehicle market has fallen for nine months in a row, and terminal sales of new energy vehicles have encountered bottlenecks. The implementation of the policy of exemption from purchase tax on new energy vehicles will have a positive impact on the development of enterprises.

Shen Hui, founder of Weima Automobile, believes that the postponement of new energy vehicle purchase tax subsidies is a great benefit for stabilizing consumer confidence. If the new energy subsidy policy is further extended, for enterprises and dealers, they can also get a certain degree of profit protection. For new energy vehicle startups, gross profit margin is important in the cold winter of the market and capital. if the gross margin is negative, it is difficult for the company to go too far, because the more it sells, the faster it dies.

In addition, Minister of Industry and Information Technology Miao Wei made it clear earlier that subsidies for new energy vehicles will not decline substantially in 2020.

In 2019, due to the sharp reduction in new energy subsidies, the industry fluctuated sharply and sales decreased significantly. Dong Yang, former executive vice president of the China Association of Automobile Manufacturers, believes that China's electric vehicles have achieved very good results, and the most important thing for 2020 is for the government to 'stabilize the policy' and decide what should be decided before the automobile industry can develop.

Announcement on the relevant policies of exemption from vehicle purchase tax for New Energy vehicles

Announcement No. 21, 2020, Ministry of Industry and Information Technology, General Administration of Taxation, Ministry of Finance

In order to support the development of the new energy vehicle industry and promote automobile consumption, the relevant policies on exemption from vehicle purchase tax for new energy vehicles are announced as follows:

From January 1, 2021 to December 31, 2022, new energy vehicles purchased will be exempted from vehicle purchase tax. New energy vehicles exempt from vehicle purchase tax refer to pure electric vehicles, plug-in hybrid (including incremental) vehicles and fuel cell vehicles.

2. New energy vehicles exempted from vehicle purchase tax shall be managed through the catalogue of New Energy vehicles exempted from vehicle purchase tax issued by the Ministry of Industry and Information Technology and the State Administration of Taxation (hereinafter referred to as the catalogue). From the date of promulgation of the catalogue, the purchase of new energy vehicles listed in the catalogue shall be exempted from vehicle purchase tax; the purchase time shall be the date indicated in the unified invoice (or valid voucher) for motor vehicle sales.

3. For the new energy vehicles that have been listed in the catalogue, when the new energy vehicle production enterprise or the imported new energy vehicle dealer (hereinafter referred to as the automobile enterprise) uploads the "Motor vehicle Factory Certificate" or the imported vehicle "vehicle Electronic Information sheet" (hereinafter referred to as vehicle Electronic Information), the field of "whether it meets the conditions for exemption from vehicle purchase tax" is marked "Yes" (that is, tax-free logo). The Ministry of Industry and Information Technology examines the tax exemption marks in the vehicle electronic information uploaded by automobile enterprises and transmits the approved information to the State Administration of Taxation. The tax authorities shall handle the formalities of tax exemption for the purchase of vehicles in accordance with the tax exemption marks examined by the Ministry of Industry and Information Technology and the unified sales invoices (or valid vouchers) of motor vehicles.

4. Automobile enterprises shall ensure that the electronic information of vehicles is consistent with that of vehicle products, and the loss of vehicle purchase tax caused by the provision of false information or materials shall be dealt with in accordance with the tax Collection and Administration Law of the people's Republic of China and its implementation rules.

5. if the staff engaged in the management of the catalogue, the examination of tax exemption marks and the tax exemption procedures perform their duties, they commit violations of law and discipline, such as abuse of power, dereliction of duty, favoritism, malpractice, etc., they shall be investigated for corresponding responsibility in accordance with the relevant provisions of the Law of the people's Republic of China on Civil servants and the Supervision Law of the people's Republic of China; if they are suspected of committing crimes, they shall be transferred to judicial organs for handling.

VI. This announcement shall enter into force as of January 1, 2021. The policy of exemption from vehicle purchase tax for new energy vehicles listed in the catalogue before December 31, 2020 will continue to be effective.

Ministry of Finance, Ministry of Taxation, Ministry of Industry and Information Technology

April 16, 2020

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