China Tax Service
Hotline: 86-755-82143422 Email: anitayao@citilinkia.com
ATAHK reads from Sina News that China’s Ministry of Industry and Information Technology(MIIT) and State Administration of Tax announced the Directory of New Energy Vehicle Models for Exemption of Vehicle Purchasing Tax (the first batch). For details, please refer to the following news from Sina News on September 1st :
The purchase tax is c.10% of car prices and the exemption will be effective from Sept 01 2014 through the end of 2017 (see details in Exhibit1). 2) On Aug 27, Bloomberg reported that the Chinese government is considering providing Rmb100bn in funding to build electric vehicle charging infrastructure to spur demand for clean energy cars.
The Reporter believe the announcement of the directory will boost new energy vehicle sales in China for two reasons: 1) the 10% savings from the purchase tax exemption could make new energy vehicles more attractive to those potential buyers who are more price sensitive; 2) the directory could serve as the list of models that can qualify for new energy vehicle subsidies nationwide, and hence reduce potential local protectionist behavior. (Currently, each city has its own list of new energy vehicle models that qualify for local subsidies, with locally-made models getting a bigger proportion of subsidies from local governments.)The second piece of news, if true, would improve the density of charging facilities significantly in China, and hence ease mileage anxiety for potential buyers of new energy vehicles.And announcements of any additional models that are eligible tax exemptions would provide further policy tailwinds for new energy vehicles.
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