China to Impose No Tax on New Energy Vehicles

The Legislative Affairs Office of the State Council announced a draft regulation on June 15, 2011 to solicit public opinions on enlarging the range of tax exemptions on vehicles and vessels, which is expected to include new energy vehicles, according to the Beijing Times.

The regulation stipulates new energy vehicles such as full-electric vehicles, fuel battery vehicles and hybrid electric vehicles are exempted from the vehicles and vessels tax. Vehicles and vessels used within airports and harbors can enjoy a free tax within 5 years.

It is said this tax-exemption would also apply to fishing vessels, special military vessels and police vessels as well as those which serve foreign embassies and resident missions of international organizations in China, following their agreements with China under the law or related international treaties.

Besides, vehicles and vessels from special regions like Hong Kong, Macao and Taiwan will also be exempted from the tax, according to the draft.

The draft regulation stipulates that a taxpayer should pay surcharges for delaying payments if he or she does not buy compulsory traffic accident liability insurance before the deadline or has not paid the tax in previous years.

This regulation on vehicles and vessels is expected to be put into practice on January 1, 2012. Related organizations and people can submit their opinions via the website http://www.chinalaw.gov.cn, or sending emails to ccs@chinalaw.gov.cn.

It is open to public opinions before July 14, 2011.