Circular of the Ministry of Finance and the State Administration of Taxation on the Policies Concerning the Value-added Tax Levied on Secondhand Goods and Secondhand Motor Vehicles

Circular of the Ministry of Finance and the State Administration of Taxation on the Policies Concerning the Value-added Tax Levied on Secondhand Goods and Secondhand Motor Vehicles

Cai Shui [2002] No. 29

March 13, 2002

After serious deliberation, the relevant policies regarding the value-added tax levied on secondhand goods and secondhand motor vehicles are hereby clarified as follows:

Article 1 When taxpayers sell secondhand goods (including secondhand operation units that sell secondhand goods and taxpayers that independently sell their own used fixed assets), no matter if they are common taxpayers or small-scale taxpayers and no matter if they have been approved as secondhand goods dispatch experiment units or not, the value-added tax shall be reduced by half and levied at the tax rate of 4% and the input tax can not be deducted.

Article 2 If the price at which the taxpayers sell their own used vehicles, motors, or yachts that are subject to consumption tax is in excess of its own value, the value-added tax shall be reduced by half and levied at the tax rate of 4%.
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