Vehicle purchase tax exemption

The Ministry of Industry and Information Technology (MIIT) and the State Taxation Administration (STA) jointly issued the Announcement (2022) no. 8 on the Issuance of the Catalogue of non-Transport Special Operation Vehicles with Fixed Devices exempted from Vehicle Purchase Tax (5th Batch).

Announcement 8 provides an update catalogue of special operation vehicles that will be exempted from the vehicle purchase tax, including wreckers, spraying vehicles, rescue vehicles, and road maintenance vehicles.

According to the Vehicle Purchase Tax Law of the PRC, the vehicle purchase tax shall be paid one-off by individuals, companies, and organisations purchasing automobiles, trams, car trailers, and motorcycles with an engine displacement exceeding 150 cc at a standard rate of 10%.

Recently, Chinese authorities rolled out an additional package of measures to boost the internal demand and consumptions, including the phased reduction of the vehicle purchase tax (for a total amount of tax equal to CNY 60 billion) applied on certain categories of passenger cars. Further clarifications are expected in the next days.