A. About Vehicle License Tax

The collection of license plate taxes in our country began in 1936. For purposes of revenue generation, some provinces, cities and prefectures began to collect license fees or user fees for cars and ships which are similar to a vehicle license tax. Due to differences in local procedures, the standards for collecting such fees differed widely in February 1947, all such collection procedures were standardized when the General Provisions for Vehicle License Tax Collection Law was promulgated. Following several amendments, this Law was superseded by the Vehicle License Tax Law in May 1950.

The Vehicle License Tax law was amended nine times between 1955 and 1979. Initially , this tax was collected directly by city and prefecture governments. Gradually, via the various amendments, the responsibility and was administered directly by cites. Very clear provisions now cover collection and registration procedures. Due to the rise in use has greatly increased and this tax has become a major source of revenue for local governments.

In 1979, Article 6 of the Law was amended in order to implement the government policies of discouraging wasteful expenditures on luxury items and encouraging energy conservation. Under the amended law, vehicle types were divided into three categories; 1) small passenger vehicles; 2) large passenger vehicles; and, 3) motorcycles. The license taxes are levied on a progressive basis according to the total cylinder displacement volume of the vehicle's engine.

In 1995, the law was amended in order to reduce the burden on people whose income is below the average level and to diminish the growth in private small passenger vehicles. Therefore, there is no tax on motorcycles below 150 cubic centimeters, and the tax on private small passenger vehicles or motorcycles above 151 cubic centimeters increased according to the total cylinder displacement volume of the vehicle's engine.

In 1998, the law was amended in order to loosen up the requirements of exemption on mentally and physically disabled persons, change the collection procedure from making public announcements for levy information to delivering tax notifications to taxpayers, and lower fine criterion.

B. Tax Scope

The owner of any form of transportation equipment using public roads or rivers, notwithstanding whether the use is for public private or military purposes, must apply to the tax authorities for an appropriate vehicle license and pay the tax due.

Public roads and rivers and those roads and rivers open for public use. Transportation equipment is defined as vehicle and vessels. At present, vessels used for transportation purposes and non-motorized vehicles are not subject to the collection of a vehicle license tax.

C. Taxpayers

Owners or users of any form of transportation equipment subject to licensing hereunder are required to pay the vehicle license lax.

D. Tax Rates

The vehicle license tax is levied upon motor vehicles according to the following rate schedules:

Rate Chart For Small Passenger Vehicles

Rate Chart For Motorcycles (96.8.10)

Note: The tractor portion of tractor trailer trucks is taxed at a rate 30% higher than that for a comparable-sized truck.