Tax Breaks Offered on Electric Cars in China
September 1, 2014 Taxation in China
BEIJING – The government of China hopes to see at least 5 million electric and hybrid cars on the road within 6 years, and is using tax breaks as an extra incentive for prospective buyers.
Late last week the Ministry of Industry and Information Technology of China issued a new statement confirming that the country’s 17 percent sales tax will no longer be applied to the purchase of selected electric vehicles.
Currently 17 vehicles have been approved to fall under the scope of the tax break program, from 11 different local manufacturers, and manufacturers Chinese manufacturers cooperating with overseas producers.
The tax break on the sale of electric vehicles is aimed primarily at helping improve the uptake of electric vehicles, in order to reduce emissions levels, but the tax break is also aimed at spurring growth in the automotive sector.
The government of China has actively advocated the use of electric and hybrid vehicles, and has, since last year, offered a subsidy of up to RMB 90 000 on the purchase of an energy-efficient car.
In July this year, the government stated that it currently aims to see at least 5 million electric and hybrid vehicles on the roads by 2020.
More models of electric vehicles may be added to the list of exempted cars in the near future, as the Ministry of Industry and Information Technology monitors the success of the program and the development of new environmentally friendly cars.
Photo By: Marianna