In order to consolidate and maintain the competitive advantage of China's new energy vehicle industry and accelerate the transition from being a major automobile country to a strong automobile country, in accordance with the relevant decisions of the State Council's executive meeting, the Ministry of Finance, the State Administration of Taxation, and the Ministry of Industry and Information Technology have issued the "Announcement on Continuation and Optimization of New Energy Vehicle Purchase Tax Exemption Policy" (Announcement No. 10 of 2023, hereinafter referred to as the "Announcement"). The main consideration is to further leverage the role of tax incentives, guide relevant parties to seize development opportunities, promote technological innovation and product innovation, continuously enhance the core competitiveness of the industry, expand the consumption of new energy vehicles, and support the high-quality development of the new energy vehicle industry.

Policy Content

1. New energy vehicles purchased between January 1, 2024, and December 31, 2025, will be exempt from vehicle purchase tax. For each new energy passenger vehicle, the tax exemption amount shall not exceed 30,000 yuan. New energy vehicles purchased between January 1, 2026, and December 31, 2027, will be subject to a 50% reduction in vehicle purchase tax. For each new energy passenger vehicle, the tax reduction amount shall not exceed 15,000 yuan. At the same time, in order to encourage enterprises to accelerate technological research and development and upgrading, the Ministry of Industry and Information Technology will optimize the technical requirements for enjoying the vehicle purchase tax exemption policy based on the progress of new energy vehicle technology, development of standard systems, and changes in vehicle models, among other factors.
2. The taxable price for vehicle purchase tax of new energy vehicles operating under the "battery swapping model" will be clarified. If the sales revenue of new energy vehicles with and without power batteries is separately accounted for and separate invoices are issued, the untaxed price stated on the unified sales invoice for new energy vehicles without power batteries will be used as the taxable price for vehicle purchase tax.
3. To strengthen and standardize management, the Ministry of Industry and Information Technology and the State Administration of Taxation will implement management of new energy vehicle models eligible for purchase tax reduction and exemption by publishing the "Catalog of New Energy Vehicle Models Eligible for Purchase Tax Reduction and Exemption" (hereinafter referred to as the "Catalog"). It requires automobile companies to mark vehicles that are included in the "Catalog" and meet the conditions for "battery swapping model" new energy vehicles during the manufacturing process. Tax authorities will handle the procedures for vehicle purchase tax reduction or exemption based on the markings and valid certificates, such as invoices, verified by the Ministry of Industry and Information Technology.
4. Specific measures are provided for handling cases where vehicle purchase tax revenue loss occurs due to the provision of false information or materials.

Policy Background

New energy vehicles integrate transformative technologies such as new energy, new materials, the Internet, big data, and artificial intelligence. They can drive the transformation of automobiles from mere transportation tools to mobile intelligent terminals, energy storage units, and digital spaces, while also promoting the upgrading and transformation of energy, transportation, and information communication infrastructure. The development of new energy vehicles is an essential path for China to transition from a major automobile country to a strong automobile country. It is a strategic measure to address climate change, promote green development, and serve as an important engine for expanding domestic demand and promoting sustained economic growth.

In recent years, China's new energy vehicle industry has entered the fast lane of development. Since 2015, production and sales have been continuously growing for eight consecutive years, placing China at the forefront globally. However, it should be noted that the new energy vehicle industry in China is still in the process of transitioning from policy-driven to market-driven. There are still some weaknesses in key core technologies and components, limited upstream resource guarantee capacity, insufficient infrastructure support, and inadequate resilience to risks. The industry's development faces significant competitive environmental pressure.

Specific Implementation Regulations and Common Questions

1. What measures will be taken to ensure the effective implementation of the new energy vehicle vehicle purchase tax exemption policy?

Answer: The extension and optimization of the new energy vehicle vehicle purchase tax exemption policy involve various policy adjustments, including setting tax reduction limits for new energy passenger vehicles, adjusting technical requirements for new energy vehicles, and reissuing the catalog of vehicles eligible for tax exemption. There are many preparations that need to be done in advance, and we will focus on the following areas: First, closely cooperate with relevant departments to jointly handle the policy transition work and ensure a smooth market transition. Second, strengthen policy promotion, guidance, and counseling, closely monitor and track the issues and suggestions raised by various sectors of society after the policy is issued, and timely respond to social concerns. Third, enhance tax service levels to ensure the effective implementation of the tax reduction and exemption policy. Fourth, leverage the advantages of cross-departmental data sharing, continuously enrich and expand cross-departmental collaboration, promptly and accurately convey information, effectively improve vehicle purchase tax management efficiency, fully leverage the incentives and guidance of tax policies, and better serve the high-quality development of the new energy vehicle industry.

2. After the implementation of the announcement, will there be any changes in the procedures for car buyers and automotive companies?

Answer: In the vehicle sales process, car buyers will continue to follow the previous procedures when applying for vehicle purchase tax exemption, so there are basically no changes.

In the vehicle production process, for new energy vehicles listed in the catalog, new energy vehicle manufacturers or importers of new energy vehicles should indicate "yes" in the field of "meets the conditions for tax reduction and exemption" when uploading the vehicle's factory certificate of conformity or the electronic vehicle information sheet for imported vehicles. Additionally, for new energy vehicles listed in the catalog and meeting the specified requirements for the "battery swapping model," the field of "is it a battery swapping mode new energy vehicle" should also be marked as "yes."

3. How is the vehicle purchase tax calculation price determined for "battery swapping model" new energy vehicles?

Answer: In order to promote and regulate the innovative development of "battery swapping model" new energy vehicles, from the perspective of guidance and standardization, "battery swapping model" new energy vehicles that meet relevant technical standards and requirements are allowed to use the purchase tax calculation price of new energy vehicles without power batteries. To accurately distinguish the purchase tax calculation price for new energy vehicles without power batteries, the seller should separately account for the sales amount of new energy vehicles without power batteries and issue separate invoices for the batteries. According to the requirements mentioned above, the purchase tax calculation price for new energy vehicles without power batteries should be based on the untaxed price stated on the unified vehicle sales invoice obtained by the buyer when purchasing a new energy vehicle without power batteries.

4. The announcement sets tax reduction limits for new energy passenger vehicles. How is it calculated?

Answer: The announcement stipulates that from 2024 to 2025, new energy passenger vehicles are exempt from vehicle purchase tax, with a tax exemption limit of up to 30,000 yuan per vehicle. For example, if Li purchased a new energy passenger vehicle that meets the tax reduction and exemption criteria stated in the announcement on February 5, 2024, with a sales price of 300,000 yuan (excluding value-added tax, the same below), and the vehicle purchase tax rate is 10%, the taxable amount would be 30,000 yuan (300,000 × 10%). According to the tax exemption policy, the tax exemption limit of 30,000 yuan is not exceeded, so Li does not need to pay vehicle purchase tax. If the sales price is 500,000 yuan, the taxable amount would be 50,000 yuan (500,000 × 10%). The tax exemption limit is 30,000 yuan, so Li can enjoy a tax exemption of 30,000 yuan and needs to pay 20,000 yuan in vehicle purchase tax.

The announcement stipulates that from 2026 to 2027, vehicle purchase tax will be halved, with a tax reduction limit of up to 15,000 yuan per new energy passenger vehicle. For example, if Zhang purchased a new energy passenger vehicle that meets the tax reduction and exemption criteria stated in the announcement on March 1, 2026, with a sales price of 300,000 yuan, and the vehicle purchase tax rate is 10%, the taxable amount would be 30,000 yuan (300,000 × 10%). According to the half-tax policy, the tax reduction amount would be 15,000 yuan (30,000 × 50%), and it does not exceed the tax reduction limit of 15,000 yuan. Therefore, according to the policy, Zhang can enjoy a tax reduction of 15,000 yuan and needs to pay 15,000 yuan in vehicle purchase tax. If the sales price is 500,000 yuan, the taxable amount would be 50,000 yuan (500,000 × 10%). According to the half-tax policy, the tax reduction amount would be 25,000 yuan (50,000 × 50%), and it exceeds the tax reduction limit of 15,000 yuan. Therefore, according to the policy, Zhang can enjoy a tax reduction of 15,000 yuan and needs to pay 35,000 yuan in vehicle purchase tax.