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On May 23, the Ministry of Finance issued the latest vehicle purchase tax policy, which generally remains unchanged. The tax rate of vehicle purchase tax remains at 10%, but the method of tax calculation has changed, so the vehicle purchase tax paid by consumers for buying new cars has also changed. The more discounted cars you buy, you can pay less tax.

Before July 1, the vehicle purchase tax was still levied in accordance with the old policy, which was calculated on the basis of the manufacturer's guided price or the invoice amount issued, while the new policy clearly stipulated that the tax was calculated on the basis of the transaction price of the new car.

The announcement makes it clear that all the price actually paid to the seller by the taxpayer for the purchase of taxable vehicles shall be determined according to the price stated in the relevant documents when the taxpayer buys the taxable vehicle, excluding value-added tax. The program will come into effect on July 1, 2019.

Lang Xuehong, deputy secretary general of the China Automobile Circulation Association, explained, "before, it was a cross-file purchase tax, which was based on the grade given by the manufacturer's guidance price and across the nearest file according to the car purchase price." Now the tax is calculated according to the amount actually paid. At present, there is a terminal discount on vehicle prices, so the taxes and fees paid by consumers should be reduced. "

At the same time, Lang Xuehong also pointed out that some of the best-selling models on the market will be sold at a higher price, so consumers will pay higher purchase taxes.

Announcement on specific policies on vehicle purchase tax

In order to implement the vehicle purchase tax Law of the people's Republic of China, the specific policies on vehicle purchase tax are hereby announced as follows:

1. Metro, light rail and other urban rail transit vehicles, wheeled special mechanical vehicles such as loaders, graders, excavators and bulldozers, as well as cranes (cranes), forklifts and electric motorcycles are not taxable vehicles.

2. All the price actually paid to the seller by the taxpayer for the purchase of taxable vehicles for his own use shall be determined according to the price stated in the relevant documents when the taxpayer buys the taxable vehicle, excluding value-added tax.

3. Taxable vehicles imported by taxpayers for their own use refer to taxable vehicles that taxpayers import directly from abroad or entrust agents to import for their own use, excluding imported vehicles purchased within the territory.

4. The taxable price of taxable vehicles produced by taxpayers for their own use shall be determined according to the sales price of similar taxable vehicles (that is, vehicles with the same serial number), excluding value-added tax; if there is no sales price of similar taxable vehicles, it shall be determined according to the component taxable price. The formula for calculating the taxable price of components is as follows:

Component taxable price = cost × (1 + cost profit margin)

For taxable vehicles subject to consumption tax, the amount of consumption tax shall be added to the taxable price of their components.

The cost and profit margin in the above formula shall be determined by the tax bureaus of the provinces, autonomous regions, municipalities directly under the Central Government and municipalities separately listed on the State plan.

5. The urban public transport enterprises in the exemption of vehicle purchase tax for public buses and electric vehicles purchased by urban public transport enterprises refer to the enterprises recognized by the competent transportation departments of the people's governments at or above the county level and qualified for urban public transport operation in accordance with the law, provide public transport travel services for the public, and be included in the list of Urban Public Transport Management departments and Urban Public Transport Enterprises Bus and electric vehicles refer to the vehicles designed and manufactured for transport passengers, including buses, trolley buses and trams, which operate according to the prescribed line and station fares, and are used in public transport services.

6. The time of occurrence of the tax obligation of the vehicle purchase tax shall be based on the time indicated on the vehicle-related certificates obtained by the taxpayer for the purchase of taxable vehicles.

7. If the vehicles that have gone through the formalities of tax exemption or reduction no longer fall within the scope of tax exemption or reduction due to transfer, change of use or other reasons, the taxpayer, the time of occurrence of the tax obligation and the amount of tax payable shall be carried out in accordance with the following provisions:

(1) if a transfer occurs, the assignee shall be the taxpayer of the vehicle purchase tax; if there is no transfer, the owner of the vehicle shall be the taxpayer of the vehicle purchase tax.

(2) the time of occurrence of the tax obligation shall be the date of the transfer or change of use of the vehicle.

(3) the formula for calculating the amount of tax payable is as follows:

Tax payable = taxable price determined at the time of initial tax return x (1-useful life × 10%) × 10%-amount of tax paid

The amount of tax payable shall not be negative.

The method of calculating the useful life is from the date on which the taxpayer filed the tax return for the first time to the date on which the situation no longer falls within the scope of tax exemption or reduction. The useful life is calculated as a whole, and those less than one year will not be counted.

8. If the vehicle purchase tax has been returned to the vehicle production or sales enterprise, and if the taxpayer applies for a refund of the vehicle purchase tax, the calculation formula of the tax refund amount is as follows:

Amount of tax refund = amount of tax paid x (1-useful life x 10%)

The amount of tax refund shall not be negative.

The method of calculating the useful life is from the date of tax payment by the taxpayer to the date of applying for tax refund.

9. This announcement shall enter into force as of July 1, 2019.

General Administration of Taxation of the Ministry of Finance

May 23, 2019

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