Corporate vehicle sales in South Korea continue to plunge this year, particularly among high-end imported models, due in large part to a new government policy aimed at curbing tax abuses. The introduction of lime green license plates for costly corporate-owned cars, effective January 2024, is seen as a primary factor behind the sharp decline. According to data from the Carisyou Data Research Institute, registrations of corporate vehicles priced over 80 million won (approximately $59,600) fell by 27.
7 percent between January and July this year compared to the same period last year. This marks a decrease of over 10,000 units, bringing total registrations down to 27,400. The decline is closely tied to the government’s new policy, which specifically targets corporate-owned vehicles exceeding 80 million won.
The lime green license plates distinguish corporate vehicles from privately owned ones, which continue to use the traditional white plates. The policy is designed to discourage companies from exploiting tax deductions meant for business-use vehicles. Businesses can claim up to 8 million won annually for corporate vehicles, with no limit on the total deductible amount over time.
This loophole has allowed companies to write off the full cost of luxury cars as business expenses, fueling demand for high-end and imported cars for a long time. The sales of popular luxury models have notably suffered under the new system. The Mercedes-Benz S-Class, a flagship sedan popular with Sou.