Shanghai (Gasgoo)- China will reduce the import tariffs on complete vehicles and parts from July 1, 2018, in order to expand the reforming and opening up in a large scale, promote supply-side structural reform and boost the transformation and upgrading of auto industry. Specifically, 135 tariff items whose tax rates stand at 25% and 4 tariff items whose tax rates stand at 20% will be reduced to 15%. As to auto parts, a total of 79 tariff items with tax rates standing at 8%, 10%, 15%, 20% and 25% respectively will be decreased to 6%.
According to the attached file released on the official website of China's Ministry of Finance, a vast majority of trucks, buses and cars will enjoy a reduction on import tax rates, which will fall from 25% to 15%. Tariff rates reduction on chassis of trucks will decrease from10% to 6%. Tariff reduction on chassis of large buses and crane trucks will drop from 20% to 6%. Other auto parts, including seat belt, door, engine hood, ABS, will see tariff rates reduction from 10% to 6%.
After the tariff rates reduction, the average tax rates of China's complete vehicles and components will be 13.8% and 6% respectively, meeting the state quo of Chinese auto industry.
Apart from normal tariff duties, taxes of imported vehicles also include value-added taxes (VAT) and business taxes. Sealand Securities analyzed that tariff rates reduction can effectively decrease a proportion of imported vehicles' prices.
German premium automaker BMW applauded China's tariff rates reduction on imported vehicles and parts, and said it will make an active response after price evaluation. Not long ago, Porsche claimed that it had started to assess China's policy on auto tariffs and will carry out measures on price adjustments.
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