According to recent information, new rules were introduced on November 1, 2025 for Russia's scrapping tax on passenger cars (also known as "chargeback"). The tax is essentially a variant of the "horsepower tax" based on vehicle horsepower. It aims to encourage consumers to buy domestically produced passenger cars and increase the cost of imported cars.‌‌

Core content of the new regulations

Taxation standard: The new regulations tax taxes according to vehicle engine horsepower. For passenger cars with horsepower less than 160, the tax is divided into two grades: 3500 rubles and 5200 rubles; for vehicles with horsepower more than 160, the tax rate is significantly increased.‌‌

Calculation example: The tax base is fixed at 20,000 rubles, multiplied by a coefficient (such as 39.7). For example, a 200-horsepower car needs to pay a rebate fee of about 794,000 rubles (about 70,000 yuan).‌‌

Policy purpose: Suppress the import of high-horsepower passenger cars through high tax rates and support Russia's local automobile industry.‌‌

Background and impact

Policy continuity: This new regulation is part of Russia's multiple adjustments to scrapping taxes since 2023. Previously, the tax rate has been increased many times in August 2023, October 2024 and other time points. Starting from October 2024, the scrapping tax will also begin to be indexed on an annual basis (increasing by 10%-20% every year) to stabilize the market and stimulate localized production.‌

Market reaction: The new regulations may aggravate fluctuations in the used car market. For example, in September 2025, new car sales in Russia briefly soared due to tax rate adjustments, but then fell. At the same time, high tax rates may increase the price of second-hand high-end cars (such as BMW and Mercedes) by an average of 20%-25% and accelerate the localized production of China brands in Russia.‌‌

Potential challenge: The new regulations may further reduce the profit margins of China and other countries 'automobile exports to Russia. In the first half of 2025, China's automobile exports fell sharply by 62% year-on-year, partly due to increasing taxes and trade restrictions.‌‌

The new regulations in November 2025 strengthen tax pressure on high-horsepower imported passenger cars and are part of Russia's long-term automotive policy adjustment. If you are involved in used car trading or car export, it is recommended to pay close attention to changes in Russia's implementation rules to avoid compliance risks.

Russia's Interfax news agency reported on December 1 that Russia's new passenger car scrapping tax rules will take effect on December 1. The new calculation method fully considers the engine power of imported cars. The relevant changes were approved by Government Order No. 1713 a month ago.

At present, the scrapping tax on imported cars from Russia is formed based on the benchmark rate (20,000 rubles per car, about 256 US dollars) and the type and displacement of the engine. The power affects the scrapping tax coefficient in an increasing proportion; imported for personal use, For cars with power not exceeding 160 horsepower, the original scrapping tax discount remains unchanged. For individuals, the preferential tax rate for a car within three years is 3400 rubles (about 43 US dollars), and for more than three years it is 5200 rubles (about 66 US dollars).

In mid-September this year, Russia announced new rules for the calculation of scrapping tax, which was originally scheduled to take effect on November 1, but Russian First Deputy Prime Minister Manturov requested a postponement until December 1, mainly considering that Russian residents were in the new regulations. New cars with more than 160 horsepower have been ordered or purchased since the draft was announced, or unpredictable delays have been encountered in the vehicle delivery process. The Russian Ministry of Industry and Trade has ensured that the new rules will not affect car buyers who had paid scrapping taxes at current rates before the new rules came into effect.

Source:Russia-China Chamber of Commerce for Entrepreneurs

[Disclaimer] The content of this website (including pictures and texts) originates from the Internet, and the copyright belongs to the original author. Respect the rights and interests of originality, and select content is only used for information sharing. If copyright disputes are involved, please contact us to handle the deletion in a timely manner.