Following approval by the State Council, the Ministry of Finance, the State Taxation Administration, and the Ministry of Industry and Information Technology jointly issued an announcement today, adjusting the preferential policies for the vehicle and vessel tax on energy-efficient vehicles and new energy vehicles.

Effective from January 1, 2027, the policy of halving the vehicle and vessel tax for energy-efficient vehicles will be terminated. The policies of exempting pure electric commercial vehicles, plug-in (including extended-range) hybrid vehicles, and fuel cell commercial vehicles from the vehicle and vessel tax will also be canceled. Taxpayers who newly acquire or had acquired the aforementioned types of vehicles before the implementation of this announcement will be subject to vehicle and vessel tax in accordance with the "Vehicle and Vessel Tax Law of the People's Republic of China," its implementing regulations, and other pertinent rules. This announcement is set to take effect on January 1, 2027.

Will pure electric passenger vehicles and fuel cell passenger vehicles be subject to vehicle and vessel tax? According to the "Vehicle and Vessel Tax Law of the People's Republic of China," pure electric passenger vehicles and fuel cell passenger vehicles are not within the scope of the vehicle and vessel tax levy and are therefore not subject to it.

Will the four categories of vehicles, such as pure electric commercial vehicles, acquired before the implementation of the "Announcement" continue to enjoy the preferential vehicle and vessel tax policies? As stipulated by the "Announcement," starting January 1, 2027, taxpayers who acquired pure electric commercial vehicles, plug-in (including extended-range) hybrid vehicles, fuel cell commercial vehicles, and energy-efficient vehicles before the implementation of the "Announcement" will no longer benefit from the preferential policies and must pay the vehicle and vessel tax as required.

How will the vehicle and vessel tax be calculated and paid for the four categories of vehicles, such as pure electric commercial vehicles, after the "Announcement" takes effect? From January 1, 2027, pure electric commercial vehicles, plug-in (including extended-range) hybrid vehicles, fuel cell commercial vehicles, and energy-efficient vehicles will need to calculate and pay the vehicle and vessel tax based on the specific applicable tax amounts determined by the people's governments of provinces, autonomous regions, and municipalities directly under the central government, in accordance with the "Vehicle and Vessel Tax Schedule of Taxable Items and Amounts" attached to the "Vehicle and Vessel Tax Law of the People's Republic of China."