Shanghai (ZXZC)- On July 31, the Ministry of Finance together with the State Administration of Taxation, the Ministry of Industry and Information Technology (MIIT) and the Ministry of Transport jointly announced that new energy vehicles (NEV) and vessels will be exempt from vehicle and vessel tax, and such tax for energy-saving vehicles will be halved.

The energy-saving passenger vehicles, which are entitled to have vehicle and vessel tax halved, should be the gasoline-powered or diesel-powered vehicles with an engine displacement of 1.6L and below that are sold in the Chinese market and meet relevant fuel consumption standards.

The energy-saving commercial vehicles that can enjoy half vehicle and vessel tax should be the natural CNG-powered, gasoline-powered or diesel-powered light-duty and heavy-duty commercial vehicles that are permitted for sales in the Chinese market, as well as fuel oil-powered or diesel-powered light-duty and heavy-duty commercial vehicles that meet relevant fuel consumption standards.

NEVs that will be exempt from vehicle and vessel tax include pure electric commercial vehicles, plug-in hybrid vehicles, and fuel cell commercial vehicles. Additionally, pure electric passenger vehicles and fuel cell passenger vehicles are exempt from the tax since they are not subject to the vehicle and vessel tax.

NEVs that will enjoy zero vehicle and vessel tax should be pure electric commercial vehicles, plug-in hybrid vehicles, and fuel cell commercial vehicles that are allowed to be sold in domestic China, meet technology standards of NEVs, pass the special tests of NEVs, and meet NEV standards. Moreover, the NEVs that are entitled to the tax exemption should also have their manufactures or dealers met the relevant requirements in product quality endurance, aftersales services, safety monitoring and battery recycling and reusing.

Industry insiders analyzed that the tax exemption policy is China’s continual support for auto industry, underlining that energy saving and emission reduction will be the major trend of auto industry in the future.