Guangzhou (JLC), June 26, 2023 – China has extended purchase tax exemption on new energy vehicles (NEVs) to the end of 2025, and continued to offer tax incentives to the end of 2027, according to a statement issued by the Ministry of Finance, the State Taxation Administration and the Ministry of Industry and Information Technology on June 19.
This came following a State Council meeting on June 2 when the authorities said the policies on NEVs would be extended and optimized, JLC reported earlier.
Under the new policy, NEVs bought from Jan 1, 2024 to the Dec 31, 2025 will be exempt from a purchase tax of up to CNY30,000 (about USD4,172) per vehicle, while the tax on NEVs purchased between Jan 1, 2026 and Dec 31, 2027 will be halved, with a tax reduction ceiling of CNY15,000 per car, the statement said.
The tax exemption and incentives cover pure electric vehicles (EVs), plug-in hybrid electric vehicles (PHEVs) and fuel-cell electric vehicles (FCEVs).
The previous exemption of purchase tax on NEVs was scheduled to expire by the end of this year, JLC reported previously. China first began exempting NEVs from purchase tax in 2014, and this is the fourth time that the tax exemption policy has been extended.
China's NEV segment has witnessed rapid growth this year. Sales of NEVs in the country expanded 60.2% year-on-year to 717,000 units in May, data from the China Association of Automobile Manufacturers (CAAM) showed.
In the first five months of the year, NEV sales increased 46.8% from a year before to 2.94 million units, accounting for a market share of 27.7%, CAAM noted.
