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Tax Cut Boosts China's Auto Sales

by Mary Swire, Tax-News.com, Hong Kong

12 January 2017


Automobile sales in China increased substantially in 2016 in the wake of a tax cut on sales of small-engine cars.

According to data published by the China Passenger Car Association on January 10, dealerships in China sold just under 24m vehicles last year, representing an annual gain of 16 percent.

Analysts are attributing much of the boost in sales to a temporary sales tax cut on vehicles with an engine displacement of less than 1.6 liters.

Under the measure, the tax was initially halved to five percent from October 1, 2015, until the end of 2016. However, in December 2016, the State Council agreed to extend the tax cut until the end of 2017, albeit at a slightly higher rate of 7.5 percent. The higher rate has been in effect since January 1, 2017.

TAGS: tax | sales tax | China

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