One Should Pay Attention to Ownership Period When Scrapping Used Cars and Buying New Ones for Tax Refund
Keelung Customs (KLC) stated that based on Article 12-5 of Commodity Tax Act, from January 8, 2021 to January 7, 2026, owners of passenger sedans, small trucks, and dual-purpose vehicles that have been registered for at least 1 year and have been manufactured for more than 10 years can receive a maximum reduction of NT$50,000 in the commodity tax if they purchase a new vehicle within 6 months before or after scrapping the old one and complete the new license registration.
KLC specified that the new vehicle owner must be the same as the old one, or the spouse or second-degree relatives of the previous owner. Second-degree relatives include grandparents, children, siblings, and grandchildren. The period of ownership for the old vehicle is calculated from the date recorded on the vehicle transfer registration paper until the date of scrapping, and it must exceed 1 year. If the vehicle is inherited, or transferred from one's spouse, the ownership periods can be combined.
KLC provided further examples as follows:
Case 1：If Alex inherits a used car having been registered as his father's property for 10 years and scraps it 1 month later, the total ownership period for the old car is 10 years and 1 month, meeting the 1-year ownership requirement for tax refund.
Case 2：If Alex inherits a used car having been registered as his father's property for 10 years, transfers it to his spouse, Bella, 1 month later, and Bella scraps it 6 months later, the combined ownership period for the old car is only 7 months, which does not meet the 1-year ownership requirement for tax refund.
KLC reminded individuals replacing used cars with new ones to pay attention to both the relationship between old and new vehicle owners and the 1-year ownership requirement for the old vehicle to avoid affecting their tax refund rights.
Contact：Bali Branch, Keelung Customs
Contact：Ms. Tsai
Tel：（02）8630-5427 #120
Reference URL：https://www.mof.gov.tw/Eng/singlehtml/f48d641f159a4866b1d31c0916fbcc71?cntId=1e936e29c78e406999e7840575921757