China reduces 7.1 billion yuan of car purchase tax in June

Shanghai (Gasgoo)- There were around 1.097 million cars benefiting from China's car purchase tax breaks during the first month after the policy came into force, according to the data released by China's State Taxation Administration.

The tax cut policy had already saved about 7.1 billion yuan ($1.061 billion) for car buyers, data from the country's top taxation agency showed.

China's Ministry of Finance and State Taxation Administration said on May 31 that the purchase tax for cars priced at no more than 300,000 yuan ($44,840) and with 2.0-liter or smaller engines would be halved. The tax cut will be applicable for purchases from June 1, 2022 through the end of the year.

For clarity, the cars applicable to the tax reduction policy refer to the vehicles that are mainly designed and manufactured to transport passengers and their carry-on luggage, and have at most 9 seats.

According to the data by the State Taxation Administration, the purchase tax levied on cars with emissions of 1.6 liters or below was decreased by 3.4 billion yuan ($508.191 million) last month, while the other 3.7 billion yuan ($553.031 million) of tax cuts were granted to cars with emissions between 1.6 and 2.0 liters.

In addition, the policy saved 5,000 yuan ($750), 10,000 yuan ($1,490), and 15,000 yuan ($2,240) per car for buyers of cars priced at 100,000 yuan ($14,950), 200,000 yuan ($29,890), and 300,000 yuan ($44,840) (excluding VAT) respectively.