Shanghai (ZXZC)- In order to support the development of the new energy vehicle (NEV) industry and promote automobile consumption, China’s Ministry of Finance, State Taxation Administration, and Ministry of Industry and Information Technology ("MIIT") recently jointly issued an announcement regarding the continuation and optimization of the policy on purchase tax exemptions for NEVs.

According to the announcement, NEVs purchased during the period from Jan. 1, 2024, to Dec. 31, 2025 will be exempted from vehicle purchase tax. The tax exemption amount for each new energy passenger vehicle (NEPV) will not exceed 30,000 yuan. From January 1, 2026, to December 31, 2027, new energy vehicles purchased will be subject to a halved vehicle purchase tax, with a tax reduction amount for each NEPV not exceeding 15,000 yuan.

Left: BYD Han DM-i, right: BYD Seal; photo credit: BYD

The purchase date will be determined based on the issuance date of valid certificates such as the unified invoice for motor vehicle sales or the specialized payment receipt for customs duties.

The NEVs eligible for the vehicle purchase tax exemption policy refer to pure electric vehicles, plug-in hybrid electric vehicles (including extended-range models), and fuel cell vehicles that meet the technical requirements for NEVs.

NEPVs refer to NEVs primarily designed, manufactured, and characterized for the transportation of passengers and their accompanying luggage and/or temporary items. They include NEVs with a maximum of 9 seats, including the driver's seat.

The latest announcement means that the vehicle purchase tax exemption for NEVs has been extended for another year. The aforesaid three departments jointly announced last Sept. that the NEVs purchased between Jan. 1, 2023 and Dec. 31, 2023 would be exempted from vehicle purchase tax.