Foreign carmakers were already on the back foot in China’s luxury segment, but the latest tax changes are set to make things even harder. In what looks like a calculated nudge against high-end imports, China’s Ministry of Finance has introduced additional taxation for vehicles priced above €108,000 (equal to $126,400 at current exchange rates), regardless of whether they’re powered by gasoline or electricity.
Previously, this so-called “consumption tax” only applied to combustion-engine models priced at €156,000 ($182,600) and above. By lowering the threshold and including electric vehicles, the updated policy seems to place added pressure on foreign brands like Mercedes and Porsche. In contrast, many domestic competitors offer similar models at lower prices, keeping them below the tax bracket.
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