Muss man für einen Luxuswagen im Millionensalzklasse 100.000 Yuan mehr ausgeben? Die Schwelle der "Luxuswagensteuer" sinkt auf 900.000 Yuan, und reine Elektromobile werden in den Steuererhebungsbereich aufgenommen.

On July 17th, the Ministry of Finance and the State Taxation Administration jointly issued the "Announcement on Adjusting the Consumption Tax Policy for Ultra - Luxury Cars" (hereinafter referred to as the Announcement), making three adjustments and one supplement to the previous policy documents.

△Photo source: Photo taken by a reporter from Time Weekly

Firstly, the Announcement adjusts the scope of collection to include all types of passenger cars and medium - and light - duty commercial buses with a retail price of 900,000 yuan (excluding VAT) and above, regardless of the power type. At the same time, for the first time, products with power types such as pure - electric and fuel - cell are included. In addition, no consumption tax will be levied on taxpayers selling second - hand ultra - luxury cars.

These three adjustments will come into effect on July 20th this year.

The Announcement also makes a supplementary explanation of the "sales amount at the retail stage" in the previous document, clarifying that this item refers to all the prices and extra - price expenses related to the car - purchasing behavior collected by taxpayers from buyers, including the prices charged in the name of premium items, accessories, and services, not limited to the vehicle price.

Overall, this Announcement expands the scope of automobile consumption tax collection and improves some tax - collection rules through supplementary explanations. For the market, models such as Yangwang U8, Zunjie S800 (top - end version), BMW 7 Series, and Porsche Cayenne, whose main selling prices range from 900,000 to 1.4 million yuan, may see price increases in the short term.

Tax Collection Scope Expanded to Pure - Electric Cars

China began to levy an additional consumption tax on ultra - luxury cars at the end of 2016.

On November 30th, 2016, the Ministry of Finance, together with the State Taxation Administration, issued the "Notice on Levying an Additional Consumption Tax on Ultra - Luxury Cars" (hereinafter referred to as the Notice), stating that in order to guide rational consumption and promote energy conservation and emission reduction, an additional consumption tax would be levied on ultra - luxury cars. This policy came into effect on December 1st of that year.

△Screenshot of the notice on levying an additional automobile consumption tax by the two departments in 2016, taken from the official website of the Ministry of Finance

Initially, the two departments only levied a consumption tax on ultra - luxury cars with a selling price of over 1.3 million yuan (excluding VAT) at a tax rate of 10%. These ultra - luxury cars were mainly fuel - powered vehicles with relatively high displacements, mostly above the 3L level.

At that time, the models within this price range were mainly imported models of luxury car brands, such as the Mercedes - Benz S - Class, BMW 7 Series, Porsche Cayenne, Land Rover Range Rover, and imported models under ultra - luxury brands such as Ferrari, Bentley, and Rolls - Royce. The selling prices of these models could reach nearly ten million yuan, and the displacement of some models exceeded 6L.

However, in recent years, the selling prices of many ultra - luxury cars have continued to decline. For example, the prices of multiple versions of models such as the Mercedes - Benz S - Class, BMW 7 Series, and Porsche Cayenne have dropped below 1 million yuan, and the scope of taxable consumption tax has continued to shrink.

On the other hand, with the development of the new - energy vehicle industry, domestic and foreign car brands have successively launched ultra - luxury new - energy cars, such as the Yangwang U8 under BYD, the Zunjie S800 of Jianghuai Automobile, and overseas brands such as the Mercedes - Benz pure - electric G - Class, BMW i7, and Porsche Taycan.

In this context, to further guide rational consumption, the two departments have adjusted the consumption tax policy for ultra - luxury cars. Compared with the previous policy, the adjusted policy starts to levy consumption tax at a threshold of 900,000 yuan (excluding VAT) and includes cars with power types such as pure - electric and fuel - cell in the scope of collection.

△Screenshot of the Announcement on adjusting the automobile consumption tax by the two departments this year, taken from the official website of the Ministry of Finance

In addition, considering that second - hand ultra - luxury cars have already paid the consumption tax at the retail stage when they were first purchased, this Announcement clearly states that no consumption tax will be levied on the sale of second - hand ultra - luxury cars to avoid double taxation.

Transaction Prices of Luxury Cars May Rise in the Short Term

Industry insiders generally believe that this adjustment in the Announcement will have an impact on the terminal prices of many ultra - luxury cars.

In China, there are mainly value - added tax and purchase tax in the production, sales, and registration stages of cars. According to the current policy, the vehicle value - added tax is a turnover tax, which is paid by dealers at the sales stage (reflected in the motor vehicle sales invoice); while the vehicle purchase tax is a property tax, which is paid by car owners when registering the vehicle.

△Photo source: Photo taken by a reporter from Time Weekly

It should be noted that not all cars with a selling price of 900,000 yuan need to pay consumption tax. Since the domestic vehicle guide prices generally include value - added tax (with a tax rate of 13%), and the 900,000 - yuan consumption tax threshold does not include value - added tax, this means that only models with a selling price (invoice price) of over 1.017 million yuan actually need to pay the consumption tax.

Calculated at a consumption tax rate of 10%, each car needs to bear an additional tax of 101,700 yuan (based on a taxable amount of 1.017 million yuan).

Will car manufacturers and terminals change the selling prices of relevant models due to the adjustment of the consumption tax policy?

Reporters from Time Weekly interviewed relevant car manufacturers such as BYD Yangwang, Mercedes - Benz, and BMW. Many car manufacturers responded that this adjustment will have a certain impact, and the specific situation is still under study.

In the view of industry insiders, the terminal selling prices of relevant models may rise due to the need to pay consumption tax, but they may also be adjusted below 1.017 million yuan to avoid paying the consumption tax.

△Photo source: Photo taken by a reporter from Time Weekly

"Previously, some dealers deliberately manipulated the car - purchase invoices to avoid or reduce the payment of consumption tax, including but not limited to issuing separate invoices or under - invoicing. Some also issued invoices in the name of accessories, services, and decorations," Lang Xuehong, the deputy secretary - general of the China Automobile Dealers Association, told reporters.

Lang Xuehong also mentioned that the tax authorities have noticed such situations and have strengthened inspections in recent years. "Especially for models that suddenly drop in price to the tax - exempt price range after the policy is introduced."

The clear explanation of the sales amount at the retail stage in the previous notice in this Announcement - that is, all the prices and extra - price expenses related to the car - purchasing behavior collected by taxpayers from buyers, including the prices charged in the name of premium items, accessories, and services - is also to reduce the possibility of terminal tax evasion.

"This supplementary explanation is to prevent the terminal market from avoiding the payment of due taxes and fees in the name of selling accessories and services," an industry insider told reporters from Time Weekly.

Overall, the consumption tax is a tax levied only on ultra - luxury cars. Since the sales volume of ultra - luxury cars is limited and the consumption level of car - buying groups is relatively high, it will not have much impact on the mainstream market and consumers.

Liang Ji, a researcher at the Chinese Academy of Fiscal Sciences, said that the adjustment and optimization of the policy of levying an additional consumption tax on ultra - luxury cars at the retail stage continue the original policy design intention of guiding rational consumption and strengthen the regulatory power over ultra - luxury car consumption.

On the other hand, Liang Ji believes that based on the current development status of China's automobile industry, it is in line with the times to include all types of cars with different power sources in the scope of application of this policy. While strengthening the regulatory function of the consumption tax, it also highlights the policy design concept of tax system fairness and unity. Moreover, the Announcement clarifies the policy details that are prone to disputes in practice, improving the certainty of the policy.

This article is from the WeChat official account "Time Weekly" (ID: timeweekly), author: Wu Kai, published by 36Kr with authorization.