On May 24, the Ministry of Finance issued an announcement on specific policies related to vehicle purchase tax. So what is the specific adjustment of vehicle purchase tax? What is the impact on car buyers?
Different from the previous old vehicle purchase tax collection policy, the announcement points out that the taxable price of taxpayers' self-produced and self used taxable vehicles is determined according to the sales price of similar taxable vehicles (i.e. vehicles with the same vehicle configuration serial number), excluding VAT.
This also means that the calculation method of purchase tax has changed.
According to the previous calculation method, the new car purchase tax = the landing price of the new car after adding the tax & divide; 1.17 (value-added tax rate 17%) & times; 0.1%. According to the new regulations, it can be understood that consumers can directly multiply the transaction price of the new car by 10% to pay the vehicle purchase tax.
Cui Dongshu, Secretary General of the national passenger car market information association, said that due to the current downturn in the car market, the promotion of many models at the terminal is very strong, and the actual transaction price is low. Therefore, according to the new calculation method, it can bring benefits to consumers to a certain extent.
On December 29 last year, the seventh meeting of the Standing Committee of the 13th National People's Congress passed the "tax law of the people's Republic of China on vehicle purchase", which stipulates that the tax rate of China's vehicle purchase tax is 10%, and the law will be implemented from July 1, 2019.
Meanwhile, the Provisional Regulations of the people's Republic of China on vehicle purchase tax, which has been in force for about 18 years, will be abolished.
Cui Dongshu pointed out that since there is no change in the tax rate, the new deal's role in helping the current car market is limited.
Since January 2009, China first launched the policy of halving the purchase tax on vehicles with displacement of 1.6L and below. In 2009, the sales volume of China's automobile market rose by 46.15% year on year, but it was cancelled in 2011.
At the end of October 2015, the policy of halving the purchase tax on passenger cars with displacement less than 1.6 liters was issued, and the car market increased by 14.93% year on year in 2016.
Since 2017, the preferential policy of purchase tax has been phased out, that is, from 5% to 7.5%.
From January 2018, the purchase tax will be increased from 7.5% to 10%.