How Korean car tax works

What the car tax is

Car tax in Korea is a local tax on owning a vehicle. Articles 127 to 130 of the Local Tax Act set the ownership based tax, and your city, county, or district collects it. A separate driving based car tax sits elsewhere in the same act and is not in this calculator.

Your notice shows a local education tax beside the car tax. It is not assessed on its own. It is a percentage of the car tax, and Article 151(1)7 of the Local Tax Act sets that percentage.

The value of the car does not enter the calculation. Passenger cars are taxed on displacement and age, while buses, trucks, and special vehicles pay flat amounts by class and size. An expensive car is not automatically taxed more.

What sets the amount

For a passenger car, multiply displacement by the rate per cc. Private cars have three bands, at 1,000 cc and below, 1,600 cc and below, and above 1,600 cc. Commercial cars have five. The rate is not applied band by band. One rate, the one the displacement falls into, applies to the whole displacement.

That makes the boundaries jump. A 1,600 cc car and a 1,601 cc car differ by one cc, but the rate changes, so the annual amount is far apart. The bands are reproduced on the rate tables page.

A passenger car with no displacement pays a flat amount. Electric and hydrogen cars fall here. Article 127(1)3 of the Local Tax Act calls them other passenger cars and gives one commercial and one private figure.

Whether a vehicle is commercial or private is decided by Article 122(1) of the Enforcement Decree. Commercial means licensed for passenger or freight transport business. A car you drive yourself is private.

How much the age reduction takes off

A private passenger car three years old or more gets a cut on each half year amount. The formula is written out in Article 127(1)2 of the Local Tax Act. It starts at half the annual amount and takes off five percent for each additional year of age.

Past twelve years the age is treated as twelve. The reduction stops at half and goes no further. A thirteen year old car and a twenty year old car pay the same.

Age here is not simply how old the car is. Article 122(2) of the Enforcement Decree defines it by the month the age count starts. Start between January and June and both halves share the same age. Start between July and December and the first half is one year lower.

So two cars bought in the same year can reach their first reduction in different years, depending on the month. This calculator takes the month and works each half separately.

Due dates and prepayment windows

There are two due periods. The first half is due 16 to 30 June and the second half 16 to 31 December. The table in Article 128(1) of the Local Tax Act sets them.

To pay the year in one go, pick one of the four windows in Article 128(3): 16 to 31 January, 16 to 31 March, 16 to 30 June, or 16 to 30 September.

The deduction is the remaining period times an interest rate. Article 125(6) of the Enforcement Decree sets that rate, and the text was pulled on the day this site was built. January leaves the longest remaining period and gives the largest deduction. September gives the smallest.

Prepaying is optional. Skip it and you pay in June and December. This calculator only lines the four windows up side by side.

What happens when the car is sold

When ownership changes during the tax period, the tax is split by how long each side owned the car and billed to each separately. Article 129 of the Local Tax Act says so, and Article 128(5) with Article 126 of the Enforcement Decree set the method.

The default divides the annual amount by the days in the year and multiplies by the days owned. For a private passenger car three years or older, the proviso in Article 126 divides the amount for the half the date falls in by the days in that half. This calculator handles both and prints which rule it used.

The statute does not say which side the registration date itself belongs to. This page counts it as the buyer's first day and says so beside the result.

If the calculated amount comes to less than 2,000 won, it is not collected. Article 130(4) of the Local Tax Act says so, and the result flags that line.

Where people get stuck

Your notice can be larger than this page shows. A local government may set the rate up to 50 percent above the standard rate by ordinance, which Article 127(3) allows. Which area did what is not in this calculator.

The amount can stop falling as the car gets older. Past twelve years the age is treated as twelve, so the figure no longer changes.

Electric cars pay the same regardless of size because Article 127(1)3 gives a flat figure. The split is by whether there is displacement, not by body type.

A notice can arrive the year after you prepaid. Prepayment covers that year only, and the next year is assessed again. Article 125(2) of the Enforcement Decree allows the local government to send next year's payment slip in January.