Tax on a new bike in China

[Lao Jia Hou]

Well, I had one of my researchers dig up some answers from the government tax bureau.

It is actually not that complicated. In fact, it pales by comparison to the insane craziness back home in Canada (pre HST where it was a blend of PST/GST, but only on certain items at certain times). But I digress.

So, here is how it works (using rounded numbers) ...

You negotiate the "purchase price" of a new bike for 10,000 rmb.

In my experience buying several new bikes in China, the advertised/negotiated price will be inclusive of the 17% VAT.

Therefore, the NET purchase price will be 10,000 divided by 1.17 = 8,547 rmb

The sales tax on new vehicles (cars or motorcycles) is 10% on the NET price.

Therefore, the sales tax on the net price is 8,547 rmb times 10% = 855 rmb

So, the TOTAL price you pay (before all the other charges) is:

8,547 (NET)
1,453 (17% VAT)
=====
10,000 (negotiated price )
855 (10% sales tax of the NET)
=====
10,855 rmb

So, a dealer could theoretically say that the "tax" is 8.55% ... BUT, there is a wrinkle ...

There seems to be some sliding scale insurance fee (80 rmb for <50cc; 120 rmb for 50cc to 250cc; 400 rmb for >250cc) that the government requires be paid prior to issuing the tax book & chop. Plus, the dealer has to get one of its minions to run around from pillar to post to get the little "tax paid book" with the "official red chop", so the dealer probably also tacks on a "service charge".

Likely, for expedience (especially when dealing with a foreigner), the dealer just lumps it all in as an 8.9% charge. Seems to be the standard.

The fapioa will show the 8,547 NET, the 1,453 VAT and the 10,000 PRICE, but it will not show the 10% sales tax. The little "tax paid book" (it is a dark green, almost black) doesn't show how much tax was paid, only that it was paid.

Neither tax is applied to used motorcycles. That's nice.

[Lao Jia Hou]

double post by mistake

[td_ref]

thank you for clarify the all cost. The VAT is 17%.

The fapioa will show the 8,547 NET, the 1,453 VAT and the 10,000 PRICE, but it will not show the 10% sales tax. The little "tax paid book" (it is a dark green, almost black) doesn't show how much tax was paid, only that it was paid.

Because you don't paid dealer for sale tax/gouzhi tax. The 'tax paid book' is paid and issued at traffic bureau.
I don't know the bikes. Car dealer can run that process "tax paid book" for you.