Law of the People's Republic of China on Vehicle and Vessel Tax

Order of the President of People's Republic of China No. 43

February 25, 2011

The Law of the People's Republic of China on Vehicle and Vessel Tax, adopted at the 19th meeting of the Standing Committee of the 11th National People's Congress on February 25, 2011, is hereby promulgated and shall come into effect as of January 1, 2012.

President of the People's Republic of China: Hu Jintao

Law of the People's Republic of China on Vehicle and Vessel Tax

Article 1 The owners or managers of vehicles and vessels (hereinafter "Vehicles & Vessels") within the People's Republic of China that are regulated in the "Table of Taxable Items and Tax Amounts for Vehicle and Vessel Tax" as attached hereto shall be the taxpayers of vehicle and vessel tax, and shall pay vehicle and vessel tax pursuant to this Law.

Article 2 The tax amounts applicable to Vehicles & Vessels shall be governed by the "Table of Taxable Items and Tax Amounts for Vehicle and Vessel Tax" as attached hereto.
The specific tax amounts applicable to vehicles shall be determined by the people's governments of provinces, autonomous regions and municipalities directly under the central government in accordance with the range as regulated in the "Table of Taxable Items and Tax Amounts for Vehicle and Vessel Tax" attached hereto and State Council regulations.
The specific tax amounts applicable to vessels shall be determined by the State Council to the extent of the range as regulated in the "Table of Taxable Items and Tax Amounts for Vehicle and Vessel Tax" as attached hereto.

Article 3 The following Vehicles & Vessels shall be exempt from vehicle and vessel tax:
1. Fishing boats for fishery and aquaculture;
2. Vehicles & Vessels exclusively used by the military and armed police forces;
3. Police Vehicles & Vessels; or
4. Vehicles & Vessels of foreign embassies and consulates in China, representative offices of international organizations in China and their relevant personnel that shall be exempt from tax pursuant to provisions of the law.

Article 4 With respect to Vehicles & Vessels that contribute to energy conservation or use new energies, the payable vehicle and vessel tax may be reduced or exempted. If it is absolutely necessary to reduce or exempt the tax due to tax payment difficulty arising from the impact of severe natural disasters or any other special reason, vehicle and vessel tax may be reduced or exempted. The specific procedures therefor shall be formulated by the State Council and submitted to the Standing Committee of National People's Congress for the record.

Article 5 The people's governments of provinces, autonomous regions and municipalities directly under the central government may, according to local conditions, reduce or exempt vehicle and vessel tax on a regular basis for public transport Vehicles & Vessels, and motorcycles, motor tricycles and low-speed trucks owned by rural residents and primarily used in rural regions.

Article 6 Insurance institutions that are engaged in the business of compulsory third party liability insurance for motor vehicles shall be the withholding agents for vehicle and vessel tax on motor vehicles, and shall collect vehicle and vessel tax on behalf of the tax authorities at the time of collecting insurance premiums, and shall issue vouchers for the taxes withheld.

Article 7 The places for vehicle and vessel tax payment shall be the places where Vehicles & Vessels have been registered or the withholding agents for vehicle and vessel tax are located. With respect to any Vehicles & Vessels that are not required to be registered, the places for vehicle and vessel tax payment shall be the places where the owners or managers of such Vehicles & Vessels are located.

Article 8 The time when the taxpayer undertakes vehicle and vessel tax liability is the month when the ownership or right to management of Vehicles & Vessels is obtained.

Article 9 Vehicle and vessel tax returns shall be filed and the tax shall be paid on an annual basis. The specific period for tax return filing and tax payment shall be specified by the people's governments of provinces, autonomous regions and municipalities directly under the central government.

Article 10 Departments in charge of vehicle and vessel registration and administration, including departments of public security, transportation, agriculture and fisheries, vessel inspection agencies and the departments in charge of the industries of vehicle and vessel tax withholding agents, shall assist the tax authorities in strengthening vehicle and vessel tax collection and administration through providing information relating to Vehicles & Vessels.
In carrying out formalities for relevant vehicle registration and regular inspection, vehicle owners or managers shall submit certificates for lawful tax payment or tax exemption to the traffic control departments of public security organs. The traffic control departments of public security organs shall carry out relevant formalities upon verification thereof.

Article 11 The administration of vehicle and vessel tax collection shall be governed by this Law and the provisions of the "Law of the People's Republic of China on the Administration of Tax Collection".

Article 12 The State Council shall formulate implementing rules in accordance with this Law.

Article 13 This Law shall be effective as of January 1, 2012. The "Provisional Regulations of the PRC on Vehicle and Vessel Tax" promulgated by the State Council on December 29, 2006 shall be repealed simultaneously.