19 July 2026 · CarsMultiverse Research Team
New cars in South Korea became roughly 1.5% more expensive on 1 July 2026, when the government’s long-running cut to the individual consumption tax (ICT) expired and the rate reverted from 3.5% to its statutory 5%.
What changed?
Korea had held the ICT on passenger cars at 3.5% as a demand-support measure. The reduction lapsed on 30 June 2026. Because the education tax (30% of ICT) and the 7% acquisition tax are calculated on top, the effective increase compounds: for a mid-range compact (pre-tax price around ₩51 million / €30,000), total purchase taxes rise to about ₩7.1 million (€4,186), up roughly ₩750,000 versus June.
Does this affect electric cars?
Less so, for now. EVs keep their ICT exemption (up to ₩3 million) and a ₩1.4 million acquisition-tax break – but both EV reliefs are legislated only to 31 December 2026, and an extension has not been decided. If they lapse too, Korean EV buyers face a similar jump in January.
Where does Korea rank globally?
Even at the restored 5% rate, South Korea sits mid-table in our 36-country car-tax ranking – a total first-year government take of about 25% of a car’s pre-tax price, far below Denmark (132%) or Singapore (450%), but well above the US (~7%).
Sources: Korean Ministry of Economy and Finance ICT schedule; easylaw.go.kr (May 2026); CarsMultiverse Car Tax by Country dataset (July 2026).
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