Second Hand Car Value-Added Tax Reduction: How To Pry The Trillions Of Automobile Stock Market?

Following the decision of the Executive Council of the State Council in March 31st to promote automobile consumption, it will provide policy support and financial incentives to the three aspects of new energy vehicle purchase, freight car replacement and second-hand car sales. In April 9th, the Ministry of Finance and the State Administration of Taxation jointly issued the "notice on the distribution of VAT Policies for used cars" (hereinafter referred to as the "announcement").

According to the notice, from May 1, 2020 to December 31, 2023, taxpayers engaged in second-hand car sales sold their second-hand cars purchased by the second-hand car, which was reduced by 2% according to the 3% levy rate according to the simplified method, instead of VAT 0.5%.

It is understood that the existing value added tax policy for used cars was formulated in 2002. Units and used car dealerships disposed of or sold second-hand cars should pay VAT on the basis of 2% of the actual transaction price. Other individuals sell their used cars and are exempt from VAT.

According to the relevant agencies, the value added tax will cut taxes for the second-hand car market to nearly ten billion yuan, which has paved the way for the scale and standardized operation of used cars, while the second-hand car dealership has ushered in a great development opportunity, and will also bring great impetus to domestic automobile consumption.

The purpose of the value added tax reduction of used cars is not to stimulate consumers to buy second-hand cars, but to reduce the burden of second-hand car operators, and stimulate the vitality of the main body of second-hand car operators, thus driving the development of the entire automobile market. So it is not a simple stimulus policy, but a measure of structural adjustment for the future development of China's auto market. In April 11th, Shen Jinjun, President of the China Automobile Circulation Association, said in an interview with the twenty-first Century economic report reporter.

In Shen Jinjun's view, China's automobile ownership has reached 260 million, which is the second largest country after the United States. How to revitalize the stock, increase the driving force and maintain the sustainable development of the automobile market is very important.

But for a long time, due to the heavy tax burden of second-hand car transactions, the volume of transaction volume in China's second-hand car market is not big enough, and the main body of the business is "loose and weak".

Once the tax policy is implemented, the distributor can carry out the replacement business in the store. On the one hand, it can promote sales of new cars through replacement, on the other hand, it can also carry out second-hand car retail. This is a great change, and it is also a thing that manufacturers are very much looking forward to. Shen Jinjun told reporters.

Leveraging the stock market

In April 10th, the China Automobile Industry Association estimated that in the second half of the year, the auto industry should be able to return to the same level in the second half of last year, but it is still difficult to make up for the losses in the first quarter and the first half of the year. In the future, China's auto market still faces greater downward pressure.

According to the statistics of second-hand car market of China Automobile Circulation Association, in March this year, the volume of second-hand car market in the country was 949 thousand and 700 vehicles, and the volume of transactions decreased by 24.06% compared with the same period last year, and the transaction volume was 58 billion 785 million yuan. In the first quarter, the total number of second-hand cars completed in the country totaled 2 million 5 thousand and 600 vehicles, representing a year-on-year decrease of 38.4%, with a transaction volume of 122 billion 153 million yuan and a cumulative turnover of 41.22% over the same period last year.

At present, China's automobile market needs a policy of "strong heart".

"Considering that second-hand cars can meet the consumption needs of different cities, the consumer market has great potential. In order to drive automobile consumption, promote the transformation and upgrading of the automobile industry, we should further increase policy support, while lightening the burden, and at the same time, we should simplify operation." On April 9th, Sun Guangqi, director of the Ministry of economic construction of the Ministry of finance, said in response to a reporter's question at the press conference of the State Council's joint defense and joint control mechanism to deal with the impact of the epidemic situation, stabilize and expand the work of automobile consumption.

According to the introduction, influenced by many factors, the development of second-hand car market in China is still lagging behind. Compared with developed countries, the proportion of second-hand car trading volume in China is relatively low, which accounts for about 1/3 of the new vehicle sales volume, and the future development space is huge.

"Take the American car market as an example. The annual peak sales of new cars are 17 million 500 thousand, and the average used car market is around 40 million cars. In other words, the sale of 17 million new cars is driven by 40 million second-hand car transactions. Now there are 260 million cars in China, assuming that 10% of them will buy 26 million cars. " Shen Jinjun said.

"For the industry, this is a relatively good news, and for consumers is also very good thing." In April 9th, an experienced industry expert familiar with second-hand car dealership said in an interview with an economic reporter in twenty-first Century. "It should be said that the second-hand car tax problem is one of the most critical issues in the development of used car industry, so we are very looking forward to the positive impact of this tax reduction policy."

In the light of the above industry experts, the second-hand car tax reduction policy may serve as an important policy fulcrum to activate and pry more than 200 million vehicle stock markets nationwide, and benefit the national economy.

"Once the second-hand car business is incorporated into one of the official main businesses, enterprises will not only create more tax revenue for the society, but also reduce the management cost of the enterprises, thus gradually activating the replacement, buy back and resale business of the huge domestic vehicle stock market, of course, this also requires the continuous coordination of relevant policies."

The above industry experts pointed out that once the distribution mode of second-hand car is mainstreaming and scale, second-hand cars will have a complete record of buying and selling as a circulation commodity and merged into the financial statements. The sales revenue will be greatly improved for the listed auto sales enterprises. Business growth point.

At the same time, the value added tax reduction of used cars will not only benefit the second-hand car business itself, but also bring more related business development. For example, second-hand car retail finance, second-hand garage financing, and can even serve as a second-hand car business upstream of new car financing leasing business.

? ? "For second-hand car consumers, with the advent of the second-hand car value-added tax reduction policy, there will be more large scale second-hand car dealers, providing consumers with high-quality second-hand car products, reliable services and more product choices. Consumers themselves are more likely to identify and identify clear service providers to get standardized services, and consumers' rights and interests are more secure. Barrier. " The industry experts told reporters.

Industry looks forward to policy details landing

"We earnestly hope that the policy rules can be landed as early as possible, such as how to instruct dealers to issue relevant invoices in accordance with the requirements of transfer, how to declare tax, and the related guidance policies of second-hand car invoices in the policy of transferring to other places." the sooner we land, the more we can bring more impetus to the industry. A brand certified second-hand car person in charge told the twenty-first Century business reporter.

While the industry is looking forward to the rapid landing of the policy, the aforementioned industry experts also point out the difficulties faced by dealers in actual transactions.

"There are still many problems to be solved in the used car industry, such as the convenience of off-site transactions, the improvement of transfer efficiency, the confirmation of temporary property rights, the reasonable restriction of the number of transactions between individuals, the liberalization of distribution of second-hand cars in some areas, and the integrity of industries that everyone cares about." Aforementioned industry experts said.

The most important thing is the recognition of temporary property rights of used cars.

At present, the basic transaction process of second-hand cars in China is first sold and then sold, that is, sellers sell second-hand cars to second-hand car dealers, and used car dealers sell the second-hand cars to buyers.

? ? ? In the actual business, in order to avoid sellers waiting for second-hand cars to transfer to buyers, they can buy new cars. Second-hand car dealers usually transfer their two drivers to their own names. In order to avoid occupancy and pay higher VAT, second-hand car dealers usually transfer second-hand cars to relevant personal names with indicators, while second-hand car dealers in Beijing and other restricted cities are also faced with the acquisition. "Index" restriction.

Due to the suspension of temporary property rights registration, the efficiency of second-hand car transaction process will directly affect the development and growth of second-hand car market.

Taking temporary property rights confirmation as an example, Lang Xuehong, Deputy Secretary General of the China Automobile Circulation Association, gave a very good suggestion: "footnotes on temporary property rights are registered on the vehicle registration certificate, and they are filed at the local vehicle management department or the traffic control bureau. For dealers, this has a clear legal backing, which means that it is easier to sell goods and keep accounts. When there are related disputes in the second-hand vehicle trading, the definition of the main responsibility of the second-hand car will have a clearer direction.

In addition, the aforementioned industry experts also pointed out that while the industry ushered in good news at the same time, car dealers should take relevant data collection, property rights confirmation, mortgage termination, insurance violation handling into management details, providing consumers with a reliable second-hand car product and solving customers' worries.

? ? In fact, in April 9th, the State Council joint defense joint control mechanism was held at a press conference to deal with the epidemic impact, stability and expansion of automobile consumption. Wang Bin, director of the consumer promotion division of the Ministry of Commerce, also said that the next step would be to speed up the revision of the "second-hand car circulation management measures", and will work with the relevant departments in several aspects: further promoting the implementation of the cancellation of second-hand car restriction policy and promotion. The free circulation of second-hand cars will be implemented; the preferential policies for VAT sales of second-hand cars will be implemented to promote healthy and standardized development of the industry; expand the second-hand car export business, expand the market development space, facilitate the registration of off-site transactions, and further prosper the second-hand car market.

"Reduce the issue of invoices for second-hand cars, excessive fees, special interests of individual city second-hand car trading market and other issues, so that second-hand car transactions fairer and more equitable, to give customers a better consumer environment, and ultimately be recognized by customers, and can lay a solid foundation for the long-term healthy development of the industry." The industry experts finally said.

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