Second-hand vehicle sales in China to be subject to lower VAT from May

China’s Ministry of Finance (MOF) and State Taxation Administration (STA) have issued a notice announcing that from May 1, 2020, to December 31, 2023, second-hand vehicle sales in China will be subject to 0.5 percent VAT, which will be down by 1.5 percentage points compared to the previous preferential VAT level of two percent. The original VAT rate for the given sales was three percent. The second-hand vehicles in question, according to the notice, are those for which registration procedures have been completed and for which transaction and transfer of ownership have been performed, and which do not yet fall within the scope of national mandatory scrapping standards. China plans to take measures to stimulate vehicle sales, including new vehicle and second-hand vehicle sales, as the automobile industry is a key industry for the country’s economic development and could create jobs which will ensure China’s steady economic