In order to promote tax fairness, my country will cancel the preferential vehicle and vessel tax policies for some cars starting next year. On July 3, the Ministry of Finance, the State Administration of Taxation, and the Ministry of Industry and Information Technology issued the "Announcement on Adjusting Preferential Vehicle and Vessel Tax Policies for Energy-Saving Vehicles and New Energy Vehicles" (hereinafter referred to as the "Announcement"), clarifying that starting from January 1, 2027, the policy of halving vehicle and vessel tax on energy-saving vehicles will be cancelled, and the policy of exempting pure electric commercial vehicles, plug-in (including extended-range) hybrid vehicles, and fuel cell commercial vehicles from vehicle and vessel tax will be cancelled.
This means that starting from next year, the vehicle and vessel tax will be fully restored to the above-mentioned cars. Since pure electric passenger cars and fuel cell passenger cars have no displacement and are not within the scope of vehicle and vessel tax, vehicle and vessel tax has not been levied before. Therefore, under the current tax law, vehicle and vessel tax will not be levied after 2027 and will not be affected by the above-mentioned "Announcement".
Vehicle and vessel tax is a type of property tax that owners or managers of relevant vehicles and vessels need to pay every year. Its core purpose is to regulate income distribution and raise fiscal revenue for local governments. In order to promote energy conservation and encourage the use of new energy, starting in 2012, the Ministry of Finance and other departments issued relevant policies to provide preferential policies for halving the tax and fully exempting the vehicle and vessel tax from qualified energy-saving fuel (gasoline, diesel) vehicles and new energy vehicles respectively. This preferential policy will officially withdraw from the stage of history after 15 years of implementation. How will the tax burden change for relevant car owners?
Liang Ji, director of the Public Income Research Center of the Chinese Academy of Fiscal Sciences, told China Business News that after the preferential vehicle and vessel tax policies for energy-saving vehicles and some new energy vehicles are canceled starting next year, the tax burden will increase for relevant car owners. However, since the vehicle and vessel tax amount is not high, taxpayers can generally bear it. Specifically, plug-in hybrid passenger cars currently on the market (including extended range) generally have a displacement of 1.5 liters and below. If you own a plug-in hybrid passenger car with a displacement of 1.5 liters, you only need to pay a vehicle and vessel tax of 420 yuan in Beijing, and only 300 yuan in Shanghai and Guangdong. Compared with local prices, this may only cost one or two meals.
Liu Bin, deputy director of the China Automotive Strategy and Policy Research Center, told China Business News that for ordinary people buying passenger cars, restoring the full collection of vehicle and vessel tax may only cost a few hundred yuan more a year. This is a relatively low proportion of the comprehensive car purchase, insurance, maintenance, parking fees and other comprehensive vehicle costs borne by car owners, so the impact will not be significant.
So, from next year, which specific cars will be affected by the "Announcement", resulting in changes in the amount of vehicle and vessel tax paid? What exactly is the tax amount that changes?
First, let’s look at the changes in taxes for owners of energy-saving cars. According to the "Notice of the Ministry of Finance, the State Administration of Taxation, the Ministry of Industry and Information Technology, and the Ministry of Transport on the preferential policies for energy-saving and new energy vehicles and vessels to enjoy vehicle and vessel tax" (hereinafter referred to as the "Notice"), there are currently two types of situations where energy-saving vehicles enjoy a 50% reduction in vehicle and vessel tax:
Category 1 is a passenger car burning gasoline or diesel with a displacement of 1.6 liters or less (including 1.6 liters). At present, the exhaust volume of this type of energy-saving fuel vehicles is concentrated between 1 liter and 1.6 liters. Under the current vehicle and vessel tax law, the statutory tax amount for annual vehicle and vessel tax is 300 yuan to 540 yuan. The specific tax amount is determined by each province within this range. In most provinces, the tax amount is set between 300 yuan and 420 yuan. Since this type of car enjoys a 50% tax reduction, the theoretical maximum annual preferential tax amount cannot exceed 270 yuan. Full taxation will resume next year, which means that the annual increase in vehicle and vessel tax will not exceed 270 yuan, and it will actually be lower.
The second category that enjoys the preferential policy of halving vehicle and vessel tax is fuel and energy-saving commercial vehicles that meet relevant technical conditions. For example, according to the Vehicle and Vessel Tax Law, passenger cars among commercial vehicles are taxed on a per-vehicle basis. The legal tax amount is between 480 yuan and 1,440 yuan. The specific tax amount is determined by each province within this range. Accordingly, full taxation will be resumed on this type of fuel-saving and energy-saving commercial vehicles starting next year, and the increased tax amount for car owners will be between 240 yuan and 720 yuan.
Liu Bin said that in recent years, policies have made many optimizations to the technical standards of energy-saving vehicles that enjoy tax reductions. The actual models that can enjoy tax reductions have been gradually reduced. The proportion of new cars that meet the standards in all new cars in 2026 is expected to be less than 10%. Therefore, after the relevant preferential policies are cancelled, the scope of impact will not be large.
Secondly, let’s look at the tax changes for new energy vehicle owners who enjoy full exemption from vehicle and vessel tax after being affected by the Announcement.
In the current vehicle and vessel tax law, passenger cars are taxed based on their exhaust volume. This is mainly because the exhaust volume is generally positively correlated with the value of the car, taking into account the principle of quantity and energy affordability and the policy orientation of energy conservation and emission reduction. Generally speaking, the larger the exhaust volume, the higher the value, and the higher the corresponding applicable tax. Among passenger cars, since pure electric vehicles and fuel cell vehicles have no displacement, they are directly excluded from the scope of vehicle and vessel tax collection at the tax law level, and do not need to pay vehicle and vessel tax. Therefore, after the implementation of the "Announcement", owners of pure electric passenger cars and fuel cell passenger cars will still not have to pay vehicle and vessel tax and will not be affected by the above policies.
New energy vehicles that are currently exempt from vehicle and vessel tax refer to plug-in (including extended-range) hybrid vehicles, pure electric commercial vehicles and fuel cell commercial vehicles that meet relevant conditions.
For example, for owners of plug-in (including extended-range) hybrid vehicles, if they are passenger cars, different tax amounts will be applied based on the vehicle's exhaust volume. Taking the relatively common plug-in hybrid passenger car with a displacement of 1.5 liters as an example, the current applicable tax amount is 300 yuan to 540 yuan, which is also the preferential amount of tax exemption policy that owners of this type of car currently enjoy. Full taxation will be restored starting next year. Theoretically, this type of car owners will have an increase in vehicle and vessel tax of 300 yuan to 540 yuan. The actual increase in tax depends on the specific tax amount determined by each province.
For pure electric commercial vehicles and fuel cell commercial vehicles, if they are passenger cars, the annual tax per vehicle according to the current tax law is 480 yuan to 1,440 yuan. If it is a truck, tax will be charged based on the curb weight per ton (16 yuan to 120 yuan).
The above table is a table of vehicle and vessel tax items and amounts, which comes from the "Vehicle and Vessel Tax Law of the People's Republic of China"