Adjustment of Consumption Tax Policy for Ultra-luxury Vehicles Starting from July 20
Ministry of Finance /General Administration of Taxation: Adjustment of Consumption Tax Policy for Ultra-luxury Vehicles Starting from July 20
A few days ago, the Ministry of Finance and the State Administration of Taxation issued an announcement on the adjustment of the consumption tax policy for ultra-luxury automobiles. The core content of the announcement is that the starting point of the consumption tax for ultra-luxury automobiles will be drastically adjusted downward from the previous “retail price of 1.3 million yuan (excluding value-added tax) and above” to “retail price of 900,000 yuan (excluding value-added tax) and above”, and the tax rate will remain unchanged at 10%. (excluding VAT) and above", with the tax rate remaining unchanged at 10%. This announcement will be implemented from July 20, 2025 onwards. Based on China's current VAT rate of 13%, a retail price of 900,000 RMB (excluding VAT) corresponds to a new car sales price of 1.017 million RMB. This also means that from 00:00 on July 20, 2025, all passenger cars whose official guide price crosses this threshold will be subject to an additional 10 percent consumption tax, regardless of whether their power source is fuel, pure electric or hybrid.
News reporter combed through the models that will be officially included in the scope of consumption tax collection under the new regulations, and many of them are popular models sold by major luxury brands in the Chinese market, such as Mercedes-Benz S-Class, BMW 7-Series, Audi A8, Porsche Cayenne, Panamera, Land Rover Defender, Range Rover Sport, Mercedes-Benz GLS, BMW X7, and Rangan U8 in independent brands. Some of the configured models.
The announcement also states that no consumption tax will be levied on taxpayers' sales of used ultra-luxury cars. Retail sales refer to all prices and out-of-priced expenses charged by taxpayers to purchasers in relation to the act of purchasing a vehicle, including prices charged in the name of fine goods, accessories and services.