China extends NEV purchase tax exemption by another year

Shanghai (Gasgoo)- China will extend its exemption of purchase taxes on new energy vehicles (“NEVs”) to the end of 2023, the country's State Council decided at an executive meeting held on August 18, as part of measures to boost automobile sales.

According to China's policy, NEVs hereby refer to all-electric vehicles, plug-in hybrid electric vehicles (including range-extended electric vehicles), and fuel cell vehicles.

To support the development of NEVs, China first began exempting NEVs from purchase tax in 2014. The policy originally expired at the end of 2017, but was firstly extended to the end of 2020.

BYD Tang EV; photo credit: BYD

In April 2020, the government announced it would once again extend the tax exemption on NEV purchases by an additional two years to better promote the sector's development and boost auto sales.

The latest decision made the favorable policy extended another year from the end of 2022.

China’s Ministry of Industry and Information Technology (“MIIT”) said in mid-July that it was intensifying efforts to research on the scheme of extending NEV purchase tax exemption and would put forth relevant results as soon as possible.

The recent executive meeting of the State Council also noted that China would make major efforts to deploy NEV charging piles.