Consumption tax threshold lowered to 900,000 yuan. Which super luxury cars will "increase in price"?
On July 17th, the Ministry of Finance and the State Administration of Taxation issued a "Announcement on Adjusting the Consumption Tax Policy for Ultra-Luxury Cars", stipulating that the scope of consumption tax for ultra-luxury cars will now include "all types of passenger cars and medium-duty commercial vans with a retail price of 900,000 yuan or more". This policy will be implemented from July 20th. Industry insiders have indicated that models like Mercedes-Benz S480, Land Rover Range Rover Prestige Edition, and Porsche Cayenne/Base models, which had previously priced their vehicles close to the threshold, will be directly impacted by this adjustment. In addition, among domestically-produced luxury cars, models like BYD Tang Yi, and Zunxi S800 top-of-the-line versions will also be affected, prompting relevant car companies to adjust their pricing strategies. Furthermore, the new policy stipulates that no consumption tax will be levied on taxpayers selling second-hand ultra-luxury cars, which will lead to significant benefits for the second-hand car market. Overall, this adjustment in consumption tax for ultra-luxury cars lowering the threshold at the same as incorporating new energy vehicles into the tax system reflects a more balanced approach between petrol and electric vehicles. In the short term, there may be a dampening effect on the demand for new cars in the 900,000-1.3 million yuan range, but in the long term, it will be beneficial for the upgrade of domestically-produced new energy vehicles and the second-hand car market.
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