Thread: Tax on a new bike in China
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#1 Tax on a new bike in China09-21-2011, 12:23 AM
Does anyone know how the new bike purchase tax works in China? Here is the latest story I have heard:
1) There is an embedded 15% VAT in the list price
2) There is a 10% purchase tax paid by the end consumer, but that is applied to the NET price (list price minus the 15% VAT)
I've been quoted (and paid) tax rates all over the map. I've even been told that taxes are on a sliding scale with bigger bikes having a higher rate (although BMW, Harley & Ducatti have different rates ... go figure).
Or, as was suggested to me by one big-bike dealer, it blends freight, prep, etc, into the list price and then strips these non-taxable items out when calculating end purchase tax.
Anyone out there know how this operates?
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#2 Re: Tax on a new bike in China09-21-2011, 05:43 AM
the VAT is paid upon bike dealer issue fapiao. how much VAT seems confusing.
Gouzhi tax (official name?) is paid upon getting plates at traffic bureau. 10% of pre VAT price.
plates fee, insure fee. That should be all.同志仍需努力
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#3 Re: Tax on a new bike in China09-21-2011, 05:48 AM
the imported bike has tariff taxes. another 2 types of authority paper.
同志仍需努力
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#4 Re: Tax on a new bike in China09-21-2011, 06:34 AM
End of 2010 it was like this (I think it still is):
Imported Bike:
Landed Cost + 10% vehicle import tax + 31% customs + type test fee + dealer margin = Dealer cost
Imported and Domestic Bike:
Dealer cost + 17% VAT = Fapiao price
Fapiao price + 8.9% vehicle purchase fee + registration = Bike on the road price
Used bike:
Sales price + 8.9% vehicle purchase fee (based on government vehicle value estimation) = Fapiao price
Fapiao in your name is issued by the local tax bureau (dealer should provide it). No VAT on used vehicles.
Fapiao price + registration = Bike on the road priceLast edited by chinabiker; 09-22-2011 at 05:33 AM.
Andy
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#5 Re: Tax on a new bike in China09-21-2011, 09:58 AM
Thanks! This is starting to clear up a huge mystery for me. Very interesting about the import charges.
Andy, do you have the 17% VAT and the 8.9% correct? Shouldn't the VAT be built into the fapiao and the sales tax (8.9%) applied to the fapiao? I really don't know - I am just guessing.
I found this on motorfans:
http://www.motorfans.com.cn/bbs/t_16996298.htm
The thread talks about an 8.3% effective rate on the fapiao (10% applied on the pre-VAT price).
When I bought one new bike earlier this year, the dealer told me 10% tax, but when I questioned why other dealers are charging 8.9%, the dealer quickly offered "OK, 8.9% is fine". WTF? I should've said other dealers were not charging tax!
Then I went home and checked the fapiaos of other new bikes I bought, and it seems that I have not been paying close attention to how much I am paying.
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#6 Re: Tax on a new bike in China09-21-2011, 11:32 AM
double post
同志仍需努力
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#7 Re: Tax on a new bike in China09-21-2011, 11:39 AMthe dealer told me 10% tax, but when I questioned why other dealers are charging 8.9%, the dealer quickly offered "OK, 8.9% is fine". WTF?
There should be some concept the dealer had in negotiating the price that you counter-offer. VAT should be the same rate, but the sale price is lower without telling customer -- dealer pay less VAT tax.
LJH, can you upload your fapiao image (blur the sensitive detail of course.), so i can have a look.同志仍需努力
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#8 Re: Tax on a new bike in China09-22-2011, 01:09 AM
Thanks for the offer, but I don't have a scanner. I took a closer look at my fapiaos and saw the 17% tax applied. On the fapiao there is the Net Price, the 17% tax, and the total amount.
For example, let's say you negotiate to buy a bike for 10,000 rmb. This is the "price" that has been negotiated/discussed with the dealer. The fapiao will show:
Sale Price: 10,000 rmb
17% tax: 1,453 rmb
Net Price: 8,547 rmb
During discussions with the dealer, the 10,000 rmb is the sales price agreed upon. In the process of preparing the fapiao, the dealer will divide the 10,000 rmb sales price by 1.17 to determine the Net price (e.g., 8,547 rmb), and then use the difference (1,453 rmb) as the 17% tax.
Next, if it is a NEW bike (according to my source), there is an additional 8.9% vehicle purchase tax that is collected during the registration process. A small, dark green book is issued indicating that the tax has been paid, but it doesn't tell you how much. According to my source, this only happens with NEW bikes. There is no vehicle purchase tax on USED bikes. Hmmmm, I am not sure about that - and Andy mentions above that it is indeed applied to used bikes. I've heard about the imputed vehicle value that the authorities do to used bikes, as Andy mentions, so maybe there is indeed a purchase tax on USED vehicles?
So, questions:
1) is the proper rate for NEW bikes 8.9% (purchase tax)?
2) are used bikes subject to this purchase tax?
3) if applied to used bikes, is the rate the same? (i.e., 8.9%)?
4) Whatever the rate (e.g., 8.9%), is it applied to the Final (10,000 rmb) or the Net (8,547 rmb) value?
BTW - for people outside China reading this, a "fapiao" is a sales receipt.
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#9 Re: Tax on a new bike in China09-22-2011, 05:47 AM
Yeah, I think you are right - rvised the original post now.
Used bike:
When I bought my bike (new), it was first registered to a local (who had a plate). Two days later it was transferred to me, so I was the second owner in the green book. When I exported my bike, customs asked for the Fapiao in my name which I didn't have - I had only the original in the name of the local guy. Then I had to get the Fapiao in my name, which is considered as evidence of transfer of ownership. This Fapiao is issued by the local tax bureau. Usually the seller should provide it and pay the 8.9%. Upon exportation I had to provide this Fapiao to the customs and went to the tax bureau and told them that I had lost it. Luckily I came to a nice guy who issued the Fapiao in my name without hesitation. From this I saw it is 8.9%.
When you buy a used bike the official way, the seller should include this 8.9% in the price and provide the Fapiao to the buyer. From what I experienced there is no VAT on used vehicles.Andy
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#10 Re: Tax on a new bike in China09-22-2011, 01:50 PM
interesting thread for 2 reasons,
firstly people sell legal second hand bikes
and secondly, people buy bikes from legit sources
but on a serious note, thanks for the info, im buying my first brand spanking new bike, didn't quite know what to expect.
this has cleared up a little (including how they plan to charge me 1,300 rmb for a license plate and 1 years insurance and the inspection thing they do and all that... looks like something will probably be a little on the fake side.
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