China extended the abolition of the tax on the purchase of new electric vehicles until the end of 2020

3 July 2019

Electric vehicles in China for half a year are exempt from tax on the purchase of the vehicle

The newspaper Beijing Daily reported that on June 1, 2019, the Ministry of Finance and State administration of taxation of China officially adopted a new law on the tax on the purchase of vehicles, with revoked earlier temporary provisions. Municipal tax authority of the PRC announced that a paper certificate of payment of tax on the purchase of the car cancelled and instead adopted the electronic version of this paper. Until December 31, 2020, the benefits of tax exemption on the purchase nanoenergetics vehicles (NEV), including battery electric vehicles (BEV), plug-in hybrids (PHEV) and vodorodnaya (FCEV) will remain unchanged.
The rate of tax on the purchase of the vehicle is 10%, and the taxable amount is calculated in accordance with the actual total cost (excluding VAT) paid by the taxpayer to the seller when purchasing taxable vehicle.
The Department of taxation of the PRC has established a specific algorithm for calculating the tax on the purchase of an electric vehicle in which the taxable amount of tax on the purchase of the car equal to the taxable price of the vehicle plus the tax rate. This provides a significant reduction in the price of the vehicle, and the tax on it.
The law on the tax on the purchase of vehicles apply to vehicles, trams, trailers and motorbikes with a volume of 150 cm3. Added two new types of vehicle non-taxable: integrated fire-rescue domestic cars with special license plates emergency services and public steam (!) and electric buses purchased by the companies of the city passenger traffic.

Chinese motorists will still be able to choose from a huge number of NEV models without fear of a tax increase 

E-certificate of tax payment can make life easier for tax and customers
With the promotion of tax information and the creation of departmental databases, the Chinese buyers will no longer be necessary to prove payment of tax on the purchase of a car on a paper document.
In relation to vehicles that were taxed after June 1, 2019, taxpayers can request or print a "Certificate of tax taxes on purchase of vehicles", through the electronic municipal Bureau of taxation website portal of municipal tax administration and public account WeChat "Beijing Taxation".

a New item on tax refund
The law on the tax on the purchase of the vehicle also includes a provision for refunds of tax. If the taxpayer returns to the manufacturer or dealer of the vehicle, which was acquired with the purchase tax, he may apply to the competent tax authority for refund. In the opinion of the tax authorities, the tax refund amount should be determined based on the period of operation of the vehicle, and from the date of tax payment till the date of filing the application for tax refund a tax deduction will be reduced by 10% for each full year of operation.
Purchase tax the vehicle to be charged once and will be charged only in the process of buying a new electric car before its initial registration. When you purchase a vehicle which has already collected tax on the purchase, then there are used cars, the tax on purchase of vehicles will not be charged.

PS So, what can be envied in the current Chinese is the responsiveness of the state apparatus on the real problems of the economy (read: challenges of life) – only began to market electric vehicles and hybrids to reduce the rate of growth after the falling automotive market, as a ready-made decision on the extension of the zero sales tax for them. Obviously, such a measure will help in maintaining a sufficiently high market growth rate NEV. However the volume of budgetary subsidies of the Federal and local level is still declining and the growth rate of electric vehicles in China will not be as high hotspare possible and will return to double-digit level. 
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