Expert Insight - Institute - 北京华政税务师事务所有限公司

Used vehicles refer to automobiles (including three-wheeled vehicles, low-speed cargo vehicles, i.e. former agricultural transport vehicles), trailers and motorbikes that are traded and transferred to ownership from the time they complete the registration procedures until they reach the national compulsory scrapping standard. Depending on the subject of sale, the sale of used cars can be divided into two categories: the sale of used cars by enterprises and the sale of used cars by natural persons, where the sale of used cars by enterprises can be divided into the sale of used cars by non-used car dealership enterprises (hereinafter referred to as "general enterprises") and the sale of used cars acquired by used car dealership enterprises. The tax treatment differs for different sales entities and sales situations, so let's learn how to pay tax for different entities and sales situations!

一、 Businesses selling used cars

（一） VAT

1.Calculation methods and applicable tax rates and levy rates
The VAT calculation methods for the sale of used cars by enterprises include general taxation and simple taxation, and the taxation methods applicable to different sales situations may be different. The following is an analysis of the VAT calculation methods, applicable tax rates and levy rates for the sale of used cars by general enterprises and used car dealerships.

2. Bills

(1)Methods of issuing VAT invoices
(1) Issuance of VAT invoices for the sale of used vehicles by general enterprises
If a general taxpayer sells its own used used cars and applies the simple taxation method to pay VAT at a reduced rate of 2% according to the 3% levy rate, it shall issue ordinary VAT invoices and shall not issue special VAT invoices, and the purchaser cannot deduct input tax. If the tax reduction is waived and VAT is paid at 3%, a special VAT invoice can be issued and the purchaser can deduct the input tax.

For small-scale taxpayers selling their own used used cars, with reference to the above treatment, from 1 April 2021 to 31 December 2021, small-scale taxpayers may issue invoices at a reduced levy rate of 1% (VAT special invoices may be issued)