The discount for applying for annual automobile tax payment is information that you must know in advance.
This is because the discount rate is different depending on when you apply for annual car tax payment.
You can receive the highest discount rate if you apply in January, so find out about annual car tax discounts.
Please apply for annual car tax payment right now. If you put it off until later, you will lose at least 100,000 won.
▼To apply for annual automobile tax payment, please use the ‘direct link’ below.▼
Annual automobile tax payment discount Wi-Tax homepage E-tax homepage thumbnail
Annual automobile tax payment discount Wi-Tax homepage E-tax homepage thumbnail
index
Car tax annual discount calculator
Annual automobile tax discount deduction rate
When was the annual car tax discount system introduced?
Reasons for decreasing annual car tax discount
Make smart use of your annual car tax discount!
Frequently Asked Questions
Good article to read together
Car tax annual discount calculator
The 2024 automobile tax will be levied twice, in June and December, at 50% of the annual tax amount (total automobile tax amount).
However, if you pay the annual tax all at once, you can pay with the amount deducted as follows.
Tax deduction based on payment date in 2024
– January: Annual tax amount × 335/366 × 5% → Approximately 4.6% of annual tax amount (deduction period February to December)
– March: Annual tax amount × 275/366 × 5% → Approximately 3.8% of annual tax amount (deduction period April to December)
– June: Annual tax amount × 184/366 × 5% → Approximately 2.5% of annual tax amount (deduction period: July to December)
– September: Annual tax amount × 92/366 × 5% → Approximately 1.3% of annual tax amount (deduction period: October to December)
○ Relevant basis: Article 128③ of the Local Tax Act, Article 125⑥ of the Local Tax Act Enforcement Decree (※ Deduction rate in 2024: 5%)
Even after looking at the above, you still don’t understand it at first, right?
Isn’t it difficult for me to calculate it one by one?
There is a place where you can automatically calculate the estimated tax amount by entering a few information such as your license plate number, vehicle type, and purpose of use.
You can do this right on the Car 365 website.
Since the Car 365 website is operated by the Ministry of Land, Infrastructure and Transport and the Korea Transportation Safety Authority, there is no risk of personal information being exposed.
Please use it safely. I will leave a direct link to the ‘Car Tax Discount Calculator’ below.
Go to car tax calculator
Car tax annual discount calculator
Car tax annual discount calculator
car tax calculator
You can go directly to the car tax calculator by clicking the link below. Car tax (estimated) calculation: Car 365 www.car365.go.kr You can check the estimated annual tax amount. It does not reflect whether you are eligible for automobile tax reduction or not.
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Annual automobile tax discount deduction rate
As of 2024, the annual automobile tax discount deduction rate is 5%.
The automobile tax annual payment discount system was introduced in the past to increase the automobile tax collection rate,
In recent years, the need has decreased as collection rates have risen above 90%.
Accordingly, the government revised the law in 2020 and reduced the deduction rate from 10% to 7% in 2023, 5% in 2024, and 3% after 2025.
2023: 7%
2024: 5%
After 2025: 3%
The annual automobile tax payment discount applies only to the period from the 1st of the following month to the end of the year based on the application date.
The method for calculating automobile tax with different deduction rates depending on the application date as of 2024 is as follows.
Actual deduction rate for annual automobile tax payment discount
Annual payment classification Payment due date Deduction rate application Monthly calculation formula Actual deduction rate
January annual payment January 16 – January 31 February 1 – December 31 11 months’ worth
March annual payment March 16 – March 31 April 1 – December 31 9 months’ worth
June annual payment June 16 – June 30 July 1 – December 31 6 months’ worth
September annual payment September 16 – September 30 October 1 – December 31 3 months’ worth
If you look at the ‘actual deduction rate’ in the table, you can see that the percentage decreases from January to September, right?
Therefore, it is most advantageous to apply for annual automobile tax payment in January.
Click here to apply for annual automobile tax payment
When was the annual car tax discount system introduced?
In order to investigate the disappearance of the annual payment discount, it is essential to understand the origins of this system.
The annual payment discount system, which was first implemented in the 1980s, appeared amidst a rapid increase in automobile tax delinquency, causing considerable concern to the government.
During this period, the automobile tax collection rate was at a very serious level of approximately 50%.
In response, the government designed incentives uncommon in other tax systems to correct the situation.
Basically, individuals are given a discount if they pay the automobile tax due in June and the automobile tax due in December in January.
As a result, this strategy significantly enhanced collection rates.
Reasons for decreasing annual car tax discount
Did I mention earlier that the reason for the annual automobile tax deduction is to increase the collection rate?
However, as the automobile tax collection rate exceeded 90% since the 2010s, both the government and local governments came to the conclusion that increasing the collection rate through tax deductions was no longer effective.
Accordingly, the government decided to revise the law in 2020 and lower the annual payment deduction rate of 10% to 7% by 2023 and 3% after 2025.
Although the number of people delinquent is expected to decrease as the incentive to pay annual car taxes decreases, it is unlikely that the overall collection rate will fall again.
Is there any way to save up some of my diminishing annual payment deductions?
Although it may not result in additional deductions, there is a clever approach to taking advantage of the annual payment deduction system.
Make smart use of your annual car tax discount!
1) Pay the payment on the last day of the payment due date
If the annual car tax deduction rate drops to 3%, it becomes difficult to justify deferring payments in this day and age of rising interest rates.
Nonetheless, you can take full advantage of the 7% deduction rate currently in effect.
The annual car tax deduction is available in January, March, June and September.
If you pay in January, 7% of automobile tax will be deducted from February to December.
Likewise, a March payment provides a 7% credit from April to December, a June payment provides a 7% credit from July to December, and a September payment provides a 7% credit through October.
This equates to a 7% deduction for December, effectively giving you a financial incentive to prepay until your December car tax bill arrives.
Therefore, taking advantage of the annual car tax deduction is in line with maximizing your financial gain.
For example, annual tax payments are due from January 16 to January 31.
The 7% deduction rate is applied the same regardless of whether payment is made on the 16th or 31st, so this is a helpful tip for those concerned about interest rates.
2) Use simple payment and interest-free installments
Choosing interest-free installments via credit card offers another way to benefit!
These days, it is also possible to pay in installments through credit cards.
If you don’t have interest on installments, you can get slightly higher financial returns by using card installments.
As the high interest rate trend continues and interest-free installment opportunities for credit card companies have decreased, in January, Samsung Card, BC Card, Woori Card, Hana Card, Suhyup Card, and Jeonbuk Card provided local tax interest-free installment services.
However, since the interest-free installment benefit varies monthly depending on the card company, it is recommended to inquire with the relevant credit card company before using it.
Another method is to settle local taxes through electronic invoicing.
By using local tax payment simple payment platforms such as Naver Pay and Kakao Pay, you can accumulate points, discount coupons, and free gifts.
3) Get additional deductions based on model year
As your vehicle ages, your tax burden also decreases.
Newly introduced cars are subject to the full car tax, but a 5% reduction is applied from the 3rd year onward, so a 50% deduction is actually possible for cars over 12 years old.
Car tax is levied annually based on the period of ownership. When purchasing a new car, taxes are calculated from the date of purchase until the end of the year.
Conversely, if you sell or scrap a vehicle, you only need to calculate the applicable automobile tax up to the date of sale or scrapping.
With many households now owning two to three vehicles, the rapid increase in the number of drivers is associated with an increased automobile tax burden.
Even though your annual car tax deduction rate is decreasing, these suggested strategies can help!
FAQ (Frequently Asked Questions)
Please tell me the annual car tax tax credit rate.
A tax credit is applied when applying for annual automobile tax payment, and the calculation formula is as follows. (Improved deduction rate applied from 2021)
* Deduction within the range of 10/100 of the annual tax amount (amount calculated according to the calculation formula according to Article 128 (3) of the Local Tax Act and Article 125 (6) of the Enforcement Decree of the Local Tax Act)
* 3% applied considering national tax return tax deduction rate (however, steps are adjusted over 5 years to ensure stable establishment of the system)
– Annual deduction rate 2021-22: 10%, 2023: 7%, 2024: 5%, after 2025: 3%)
[Base year: 2024]
– January: Annual tax amount x 335/366 x 5% -> Approximately 4.57% of annual tax amount (deduction period February to December)
– March: Annual tax amount x 275/366 x 5% -> Approximately 3.76% of annual tax amount (deduction period from April to December)
– June: Annual tax amount x 184/366 x 5% -> Approximately 2.52% of annual tax amount (deduction period July to December)
– September: 2nd quarter tax x 92/184 x 5% -> 2nd quarter