OVERVIEW OF CHINA'S CURRENT TAX SYSTEM
Vehicle and Vessel Usage Tax
(1) Taxpayers
Taxpayers include enterprises, units, individual household businesses and other individuals who possess and operate vehicles and/or vessels within the territory of the People's Republic of China (excluding enterprises with foreign investment, foreign enterprises and foreigners).
(2) Tax base, tax amount per unit and computation of tax payable
The tax base are classified into two categories respectively for vehicles and vessels: the tax base for vehicles is the number of the taxable vehicles or the net-tonnage of the taxable vehicles; the tax base for vessels is the net-tonnage or the deadweight tonnage of the taxable vessels.
The annual amount of tax payable is separately computed for vehicles and vessels:
a. For vehicles: 60 to 320 yuan per passenger vehicles; 16 to 60 yuan per ton ( net-tonnage ) for cargo vehicles; 20 to 80 yuan per motorcycle; 1.2 to 32 yuan per non-motorized vehicle.
b. For vessels: 1.2 to 5 yuan per net tonnage for motorized vessels; 0.6 to1.4 yuan per deadweight tonnage for non-motorized vessels.
The formula for calculating tax payable is:
(a) Tax payable = Number (or net-tonnage ) of taxable vehicles × Applicable tax amount per unit
(b) Tax payable = Net-tonnage (or deadweight capacity) of the taxable vessels × Applicable tax amount per unit
(4) Major exemptions
Tax may be exempt on the vehicles and vessels self-used by governmental organs, people's organizations and military units; the vehicles and vessels self-used by units financed by financial fund allocation; the fishing vessels with a deadweight capacity not in excess of one ton; the pontoons and floating docks used exclusively for passengers, the loading or unloading of cargo and the storage of goods; the vehicles and vessels used by police department, fire department, health department and environmental department; the vessels subject to payment of Vessel Tonnage Tax according to Rules; special vehicles designed for the convenience of the handicapped; and the tractors used mainly in agriculture production.
