Complete Korean Car Tax Guide: Calculation and Payment Methods
2025-01-12
1. What is Car Tax?
Car tax is a local tax imposed on car owners in Korea. Paid twice a year in June and December, the tax amount is determined by engine displacement (cc). For non-commercial passenger cars, larger displacement means higher tax.
2. Tax Calculation Method
Non-commercial passenger car basis: โค1,000cc 80 KRW/cc, โค1,600cc 140 KRW/cc, >1,600cc 200 KRW/cc. Example: 2,000cc vehicle = (1,000cc ร 80) + (600cc ร 140) + (400cc ร 200) = 244,000 KRW/year. Light cars (โค1,000cc) have low tax, about 80,000 KRW/year.
3. Tax Deductions and Discounts
โ Prepayment discount: Up to ~10% discount for January annual payment (exact rate varies by municipality). โก Disabled/veterans: Exemption or reduction (when requirements met). โข Electric/hybrid cars: Reduction benefits (up to 1-1.4M KRW). โฃ Large families: Reduction in some municipalities. โค Light/small cars: Inherently low base tax.
4. Payment Period and Methods
1st installment (June): June 16-30. 2nd installment (December): December 16-31. Annual payment: Pay full year in January (January 16-31) for discount. Payment methods: Wetax, internet Giro, bank auto-transfer, ARS phone payment, virtual account transfer, mobile apps, etc.
5. Penalties for Non-payment
Failing to pay car tax on time results in: โ 3% penalty. โก License plate confiscation/seizure when delinquent. โข Cannot deregister/transfer car registration. โฃ Possible insurance premium increase. โค Possible credit score decrease. Must pay within deadline.
6. Tax-Saving Tips
โ Save ~10% with January annual payment. โก Choose light/small cars for lower base tax. โข Purchase eco-friendly cars (electric, hybrid) for reduction benefits. โฃ Check if eligible for large family/disabled reductions. โค Manage car ownership period (based on June 1, December 1). โฅ Check municipal reduction programs.