Lamborghini’s super Urus SUV (L) and Aventador SVJ. (image: Lamborghini)
SEOUL, March 15 (Korea Bizwire) — South Korean President-elect Yoon Suk-yeol’s campaign pledge to change the color of corporate vehicle license plates to light green is creating a sense of strain among luxury car importers.
Yoon’s pledge is aimed at preventing the wealthy from evading tax by registering luxury cars they use for personal purpose as corporate vehicles.
In reality, sales of luxury cars rose by 10 to 30 percent last year. More than 80 percent of luxury cars were registered as corporate vehicles.
After buying and using luxury cars for personal purposes, the wealthy tend to register them as corporate vehicles as a way to obtain various incentives in terms of taxes and insurance costs.
Corporate vehicles can be written off as a business expense for up to 15 million won (US$12,080) a year plus a depreciation cost of up to 8 million won. In addition, their fuel and insurance expenses can also be deducted from tax.
Even when businesses make false registrations, there are no tools available to detect such practices.
Yoon’s pledge drew positive responses in online car communities. It’s a more realistic pledge than unilaterally slashing tax benefits for all corporate vehicles.
At present, the nation’s vehicle license plates are classified into general (white), business (yellow, orange), electric vehicle (blue) and diplomat (navy blue).
J. S. Shin (js_shin@koreabizwire.com)
