The Chinese government, seeking to stimulate flagging car and light truck sales, will let buyers pay sales taxes based on prices after any discounts.
The new tax policy will take effect July 1, the Chinese ministry of finance said last week.
The 10 percent tax is now collected on the list price of light vehicles.
China’s new-car market, which started contracting in July 2018, continues to shrink.
In the first four months, new light-vehicle deliveries fell 15 percent to some 6,837,600.
To revive sales, carmakers and dealers have offered steep discounts to new car buyers since the start of this year.