China Lowers Tax Threshold for Ultra-Luxury Cars

In a strategic move, China is altering the way it levies consumption taxes on ultra-luxury vehicles. The finance ministry's statement disclosed that starting July 20, vehicles priced at 900,000 yuan ($125,348) or above will be subject to these taxes.

This marks a reduction from the previous threshold set in 2016 at 1.3 million yuan. This policy shift is expected to expand the number of vehicles falling under the taxed category, reflecting China's economic strategy to increase domestic revenue.

Notably, used ultra-luxury cars are exempt from this tax revision, providing some relief to pre-owned vehicle sellers. The current currency exchange places the yuan at 7.1800 per U.S. dollar.

(With inputs from agencies.)