China slaps extra 10 percent tax on 'super cars'

Reuters News
Posted: Nov 30, 2016 8:09 PM

SHANGHAI (Reuters) - China will impose an extra 10 percent tax on high-end cars in a bid to rein in lavish spending and to reduce emissions, the ministry of finance has said, a potential headache for luxury car makers.

The new tax rate will affect cars costing 1.3 million yuan ($188,852) and above, the ministry said in a statement late on Wednesday, which could impact high-end luxury brands such as Ferrari, Aston Martin and Rolls-Royce.

China, spearheaded by President Xi Jinping, has been cracking down on ostentatious shows of wealth over the past few years, a drive that has hit domestic luxury sales from premium spirits to handbags.

The latest move, which comes into effect from Thursday, will likely only be a small deterrent to wealthy car buyers already willing to open their wallets, but does signal a tighter stance by Beijing on high-end luxury in the sector.

($1 = 6.8837 Chinese yuan renminbi)

(Reporting by Adam Jourdan; Editing by Paul Tait)