Subsidies and tax incentives support car trade-in
2024-08-14
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Recently, the National Development and Reform Commission and the Ministry of Finance issued a notice on "Several Measures to Further Support Large-Scale Equipment Updates and Trade-ins of Consumer Goods" (hereinafter referred to as the "Measures"), further raising the subsidy standards for vehicle scrapping and renewal.
According to the latest "Measures", the subsidy for scrapping and updating cars has been greatly increased. Individual consumers who scrap fuel passenger cars with national emission standards of III or below or new energy passenger cars registered before April 30, 2018 (inclusive), and purchase new energy passenger cars included in the "Catalogue of New Energy Vehicle Models for Vehicle Purchase Tax Reduction and Exemption" or fuel passenger cars with a displacement of 2.0 liters or less, will receive a subsidy of 20,000 yuan for new energy passenger cars and 15,000 yuan for fuel passenger cars with a displacement of 2.0 liters or less.
So, how should consumers apply for subsidies? According to reports, after consumers complete the procedures for scrapping old cars and purchasing new cars, they can use the car trade-in platform on their mobile phones and computers to complete the "one-stop service, mobile exchange" before 24:00 on January 10, 2025, and fill in the "Scrapped Motor Vehicle Recycling Certificate", "Motor Vehicle Cancellation Certificate", "Motor Vehicle Sales Unified Invoice" and "Motor Vehicle Registration Certificate" and other documents to facilitate the application of subsidies.
In addition to the one-time subsidy, the superimposed tax and fee concessions are also substantial. A relevant person in charge of the Goods and Services Tax Department of the Sichuan Provincial Taxation Bureau introduced: "At present, consumers who purchase new energy vehicles between January 1, 2024 and December 31, 2025 are exempt from vehicle purchase tax, and the tax exemption for each new energy passenger vehicle does not exceed 30,000 yuan. During this period, consumers who purchase new energy passenger vehicles with an invoice price (excluding tax) of 300,000 yuan or less can be exempted from vehicle purchase tax. New energy vehicles purchased between January 1, 2026 and December 31, 2027 will be subject to a 50% reduction in vehicle purchase tax, and the tax reduction for each new energy passenger vehicle will not exceed 15,000 yuan."
For example, if a consumer buys a new energy passenger car with an invoice price (excluding tax) of 280,000 yuan in May 2024, no vehicle purchase tax will be required. If the consumer buys this new car worth 280,000 yuan in March 2026, he or she will need to pay 14,000 yuan in vehicle purchase tax.
Li Jianjun, vice dean of the School of Finance and Taxation at Southwestern University of Finance and Economics, said that the car trade-in policy is not only a people-benefiting project that meets the people's needs to improve their quality of life, but is also an important measure to promote the construction of a new development pattern. The country is also increasing financial support in fiscal, taxation and other aspects, which will help further stimulate the vitality of the automobile market and create a new situation of high-quality development.
Data from the China Automobile Association shows that from January to June 2024, the production and sales of new energy vehicles reached 4.929 million and 4.944 million respectively, up 30.1% and 32% year-on-year respectively. The effectiveness of Sichuan's automobile trade-in policy is also gradually showing, with automobile retail sales of units above the designated size in the province increasing by 7% year-on-year in June.
