Article 109-2 (Reduction or Exemption of Individual Consumption Tax for Replacement of Old Automobiles)

Where a person (including a corporation) who owns, as of December 31, 2024, an automobile newly registered before December 31, 2014, pursuant to the 「Automobile Management Act」 (excluding motorcycles and used automobiles acquired by a person registered as an automobile dealer pursuant to the 「Automobile Management Act」 for the purpose of sale. Hereinafter referred to as "old automobile" in this Article), scraps or exports the old automobile and newly registers a passenger automobile (limited to passenger automobiles other than passenger automobiles using diesel among new vehicles as defined in Article 2, Item 7 of the 「Automobile Management Act」; hereinafter referred to as "new car" in this Article) in their own name within two months before or after the date of deregistration of the old automobile, the individual consumption tax shall be reduced or exempted by 70 percent of the amount of individual consumption tax. In this case, the reduction or exemption of individual consumption tax shall be limited to one new car per old automobile. <Amended by Act No. 17013, Dec. 31, 2019; Act No. 19271, Mar. 14, 2025>

If a person who does not meet the requirements of paragraph (1) receives a reduction or exemption of individual consumption tax, the head of the competent tax office or the head of the competent customs office shall 추징 (collect additionally) an amount calculated according to the following subparagraphs from the taxpayer under Article 3 of the 「Individual Consumption Tax Act」: Provided, That if there are reasons prescribed by Presidential Decree, the purchaser of the new car shall be deemed the taxpayer under Article 3 of the 「Individual Consumption Tax Act」. 1. The amount of tax reduction or exemption under paragraphs (1) and (2) (if a reduction or exemption is received for two or more new cars per old automobile, it shall be the amount of tax reduction or exemption for all new cars). 2. An amount equivalent to 10 percent of the amount of tax reduction or exemption under subparagraph 1 as an additional tax (if a reduction or exemption is received for two or more new cars per old automobile, it shall be an amount equivalent to 40 percent of the amount of tax reduction or exemption).

Matters necessary for the procedures for applying for reduction or exemption, verification and submission of evidence, and the collection of reduced or exempted tax amounts and additional taxes under paragraphs (1) through (3) shall be prescribed by Presidential Decree.