Sales of large engined cars are to be increased dramatically, and small cars tax is expected to fall to encourage the take up of smaller cars.
Engine Size - Current Tax - Tax After Reform
Engines smaller or equal to 1.0l - 3% - 1%
Engines over 1.0l but less than 2.0l - 5% - 5%
Engines over 2.2l but less than 3.0l - 9% - 9%
Engines over 3.0l but less than 4.0l - 15% - 25% (
Engines over 4.0l - 20% - 40%
It seems that the Chinese government classifies anything over 3.0l as being a big engine, judging by their tax brackets. Tax for under 3.0l models does not appear to have changed as of yet. Bigger cars such as the Lincoln Navigator, and Humvees have become regular spots around China over the past few years, and the line up of bigger engined cars is growing all the time thanks to luxury SUV’s being regulary introduced to the Chinese market place. Hopefully the increased taxes will steer some people away from those vehicles.
good move
Sounds like a bit of bad news for Toyota, who reportedly plans to export some of it’s U.S. production of Sequoia SUVs and Tundra pickups to places like China.
More taxes for the rich, can’t be a bad thing. Will it make imported cars cheaper or more expensive than now?
From what I understood, WTO rules are supposed to cancel out import tariffs on imported cars. Perhaps someone can explain that to me, I dont totally understand it myself!
After entry into WTO, China promised to decrease the tariff of imported cars yearly as follows:
2002.1.1 - 43.80%
2003.1.1 - 38.20%
2004.1.1 - 34.20%
2005.1.1 - 30.00%
2006.1.1 - 28.00%
2006.7.1 - 25.00%
And has done so…
Chinese friends were telling me that 2008 would see the cancellation of tariffs.
Any truth in that?
I really doubt it..
this tax wat they just highred is the consumption tax and not the import tax.
there are 4 diffrent kind of taxes you need to pay befor you can get the car on the Road.
China promised the WTO to cut the Car import taxes what they also do but on the same time they always higher the consumption tax.
Max,
Enlighten us as to what taxes need paying. Off the top of my head from when I bought the last two cars I had to pay:
*Sales Tax (Gou Zhe Shui)
*Road Tax (Yang Lu Fei)
*License plates (Gua Pai Fei)
and something else.
and then
*Insurance
the 4 major taxes are as follow:
* Import duty tax (25%)
* consumption tax (depands on the engine size, 1% - 40%)
* value added tax (17%)
*License Plate Tax (10%)
these are the 4 major taxes that need to be payed one time before impot of a car.
I didnt count about the Road tax and so on because the Road tax need to be payed every year.
the way how to caculate the total tax rate if you put all the 4 majour taxes together is to a science itself and im pretty sure that it cant be conform with the WTO rules.
here the total taxrate to import a car and get it on the road before and after the tax raise:
engine size / before / now
Engines smaller or equal to 1.0l - 54.70% - 60.73%
Engines over 1.0l but less than 2.0l - 68.67% - 68.67%
Engines over 2.2l but less than 3.0l - 76.61% - 76.61%
Engines over 3.0l but less than 4.0l - 88.52% - 108.36%
Engines over 4.0l - 98.44% - 138.13%
Our main business is to import new and used cars into china and we also have some informations about it on our website www.VIP-Motor.com.cn but our website and email is not working at the momment due an server moving.
for more details you also can contact me under maxindg@gmail.com
The import duty of 25% most likely conforms with WTO rules. The other taxes are local taxes which are common in most countries and may (or may not) fall outside the WTO rules but most likely not as China has a right to tax its own people as does any country. Those taxes (except import duty) are for locally produced vehicles as well right??
My home pays 80-90%% of the fuel price as taxes (apparently) and 60% of the annual registration fees are basically taxes as well. This is with 0% duties on new and used imported vehicles. There is a GST (VAT) charge to pay though but that is the same 12.5% for everything imported.
Nice free plug Max
I dont mind people plugging their sites when they actually contribute something worthwhile to the site!
Thanks Max, great info.
There should be a good market for 2.1L cars then - there apears to be no tax on them
That is exactly what I thought!
Maybe it means that 2.1L cars will be illegal now because there is no tax for them……
Cars smaller than 1.0 will not generally sell very well as some provinces have banned these cars from going on expressways….
Just imagine the hassle….you buy a car, can drive round town but when you need to go to the next city…guess what…you take the bus/train
Have you driven between cities? Often it’s much, much more expensive to drive - if you’re buying a