ART. 109-2 (Reduction and Exemption of Individual Consumption Tax on Replacement of Old Automobiles)

Where a person (including a corporation) who owns an automobile newly registered before December 31, 2014, in accordance with the Automobile Management Act (excluding motorcycles and used automobiles acquired for sale by a person registered as an automobile dealer under the Automobile Management Act; hereinafter referred to as "old automobile" in this Article) as of December 31, 2024 (based on the registration date; hereinafter the same shall apply in this Article), scraps or exports the old automobile and newly registers a passenger automobile (limited to passenger automobiles other than diesel passenger automobiles among newly manufactured automobiles as defined in Article 2, subparagraph 7 of the Automobile Management Act; hereinafter referred to as "new automobile" in this Article) in their name within two months before or after the date of cancellation of registration 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 automobile per old automobile. <Amended by Act No. 17015, Dec. 31, 2019; Act No. 19234, Mar. 14, 2025>

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

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