Ministry of Finance: Impose a 10% consumption tax on ultra-luxury cars in retail.


Ministry of Finance: Impose a 10% consumption tax on ultra-luxury cars in retail.

  The industry believes that a consumption tax on luxury cars in the retail sector will not only reasonably guide consumption, but also increase fiscal revenue.

  The Ministry of Finance and the State Administration of Taxation issued a notice yesterday, saying that in order to guide rational consumption and promote energy conservation and emission reduction, with the approval of the State Council, consumption tax will be imposed on ultra-luxury cars. This regulation will be implemented as of December 1, 2016.

  Tax will be increased by 10% on the sales of ultra-luxury cars.

  The notice pointed out that the sub-tax item of "super luxury cars" will be added under the tax item of "cars". The scope of collection is passenger cars and light commercial buses with a retail price of 1.3 million yuan (excluding value-added tax) and above, that is, ultra-luxury cars in the sub-tax items of passenger cars and light commercial buses. For ultra-luxury cars, on the basis of the consumption tax levied at the current tax rate in the production (import) link, the consumption tax is levied at the retail link, and the tax rate is 10%. The notice makes it clear that the units and individuals that sell ultra-luxury cars to consumers are taxpayers in the retail link of ultra-luxury cars.

  10% consumption tax will not be levied on the sold vehicles for filing within 5 days.

  For distribution channels, will the vehicles that have signed automobile sales contracts before November 30 be affected by the adjustment of the consumption tax on ultra-luxury cars? It is understood that for ultra-luxury cars that have signed automobile sales contracts before November 30 (inclusive), but have not delivered the real thing, taxpayers will file the signed automobile sales contracts with their competent tax authorities within 5 working days from December 1 (inclusive). According to the notice information, the retail consumption tax with the tax rate of 10% will not be levied for those who are filed according to the regulations, and the retail consumption tax will be levied if they are not filed and not filed within the prescribed time limit.

  It is difficult to manage the tax after tax collection.

  According to the information, when the consumption tax was implemented in 1994, it included automobile tax items. In the consumption tax reform in 2006, the automobile consumption tax was adjusted. It is understood that the current car tax items are divided into two categories: passenger cars and medium and light commercial buses. Among them, the larger the cylinder capacity of passenger cars, the higher the tax rate of consumption tax, and the tax rate ranges from 1% to 40%. Passenger cars with a cylinder capacity of more than 4 liters will be subject to a consumption tax rate of up to 40%. The consumption tax rate of 5% is applicable to medium and light commercial buses. The taxation link is in the production and import links.

  According to industry analysts, a consumption tax will be levied on luxury cars in the retail sector, with the aim of reasonably guiding consumption and increasing fiscal revenue.

  "The consumption tax collection link is changed to the retail link. The advantage is that the final selling price of goods can be taxed, and the tax base is obviously expanded, which can increase fiscal revenue and reasonably guide consumption, but the challenge is that the collection and management are difficult." The above analysis pointed out that the relevant departments took luxury cars as a breakthrough and imposed a consumption tax on the retail sector, which is also based on the fact that there are not many 4S retail stores in China compared with retail stores such as tobacco and alcohol, and it is relatively easy to control. This will provide experience for the next stage of other tax items to move back.

  Text/reporter Ren Xiaoyuan


  The actual impact on car buyers will not be great.

  At present, the models with more than 1.3 million yuan are basically ultra-luxury car brands such as Bentley, Maserati and Porsche. In addition, some brands such as BMW X6, BMW 7 Series, Mercedes-Benz GL Series and Audi A8 have reached this level. Therefore, the influence of the new consumption tax policy is relatively small and fixed. But at present, it should not have much impact on the sales in this market.

  China’s automobile consumption tax was established in 1994, and the latest automobile consumption tax reform was in 2008. The tax rate for passenge cars with displacement of 3.0L to 4.0L is raise from 15% to 25%, and that for passenger cars with displacement of 4.0L is raised to 40%. Reduce the consumption tax rate of small-displacement passenger cars, and reduce the tax rate from 3% to 1% for passenger cars with displacement below 1.0L This time, the tax rate will be increased by 10% for ultra-luxury cars with a price of more than 1.3 million yuan. This adjustment mainly affects the sales of imported vehicles.

  According to the previous consumption tax policy, the tax rate of ultra-luxury cars is basically 40% high-end. Compared with the consumption tax of 40%, the current 25% tariff and 17% value-added tax have become small heads, so for luxury cars with a price of several million yuan, the consumption tax itself is an important factor to increase the difference between domestic and foreign car prices. Judging from the new policy introduced this time, an additional 10% consumption tax will be imposed on ultra-luxury cars with a price of more than 1.3 million yuan, which will not have a great impact on car buyers. In fact, many 4S shops will basically increase the price of ultra-luxury cars by 100 thousand to several hundred thousand yuan above the manufacturer’s guide price before they can pick up the car, and most car buyers also acquiesce to this.

  Text/reporter zhangqin


  Whether the purchase tax on small-displacement vehicles will continue to be halved is inconclusive.

  In fact, in the automobile consumption, there is also an essential expenditure, which is the purchase tax. China’s automobile purchase tax rate is set at 10%, which accounts for a large proportion in the cost of car purchase. However, at present, China has adopted a preferential policy of halving the purchase tax for small-displacement vehicles of 1.6 liters or less, that is, it is levied at 5% of the vehicle price, which has played a significant role in promoting the consumption of small-displacement vehicles.

  The preferential policy of halving the purchase tax on small-displacement vehicles has been implemented since October 1, 2015. According to the plan at that time, the policy will expire on December 31, 2016, which means that there is still a whole month left. Up to now, there is no official explanation on whether the preferential policy of halving the purchase tax will continue, and more is speculation from outside. It is also reported that various departments at the government level have different opinions on whether to continue this policy. Earlier, some media reported that on November 1, the National Development and Reform Commission, the Ministry of Communications, the Ministry of Finance and other ministries and commissions held departmental meetings to study whether to continue this policy, but no news came out since then.

  The data shows that the prices of 1.6-liter and below displacement models are mostly concentrated below 200,000 yuan. According to the current preferential policies, the purchase tax for bicycles ranges from 3,000 to 10,000 yuan. Once this policy is cancelled next year, it is likely to drive the sales ratio of models above 1.6 liters to increase in a short time. According to the data of China Automobile Association, in 2015, the sales of passenger cars of 1.6 liters and below reached 14,508,600, an increase of 10.38% over the same period of last year, which was higher than the overall growth rate of passenger cars and accounted for 68.6% of the sales of passenger cars.

  Text/reporter zhangqin for the picture/vision china


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