Effective January 1, China will start implementing a modified Vehicle and Vessel Tax Law that imposes a corresponding higher tax levy for vehicles with an engine size of 2 liters and above.
An online statement from the State Administration of Taxation on Sunday said that under the Vehicle and Vessel Tax Law, the rates of taxes will depend on the size of vehicles. Moderate taxes will be levied on passenger vehicles whose engine size range between 2 liters and 2.5 liters, while those with an engine size above 2.5 liters will be imposed much higher taxes, the Xinhua News reported.
Tax rates for vehicles whose engine size are 2 liters or below will be unchanged.
Based from a second draft copy of the law earlier this year, taxes on 1.0 liter to 1.6 liters engine-capacity vehicles fell from 360 to 660 yuan ($57 to $104) to 300 to 540 yuan. Levies on vehicles with 1.6 liters to 2.0 liters capacities likewise slid from 660 to 960 yuan to 360 to 660 yuan.
The State Administration of Taxation said the tax adjustments are part of China’s efforts to conserve energy as well as reduce carbon emissions in the country.
China, being the world’s largest consumer of energy, will allot $473.1 billion on clean energy investments in the next five years.
Excluded from paying the tax under the regulation were the electric vehicles and hybrids, the statement said.
The new regulation kept the original tax rates for freight vehicles, motorcycles, and vessels.
Yachts, however, will be applied a tax range between 600 yuan and 2,000 yuan per meter of the yacht’s length.
Passenger vehicles, commercial vehicles, trailers, motorcycles, and vessels are identified as taxable under China’s Vehicle and Vessel Tax law. Foreign-based vehicles, including those from China’s Hong Kong, Macao, and Taiwan, are excluded from the tax.
