If you live in a metropolitan area such as Tokyo or Osaka, you might not need a car because the trains are very convenient. However, some people may need it if they live in the countryside. This time, we will explain the automobile tax that is inevitable to own a car in an easy-to-understand manner.
Car Tax (Vehicle Tax) in Japan
There are 4 main kinds of taxes on cars. If you own a car you have to take all this. Let’s explain one by one. The data below is based on Breau of Taxation, Tokyo Metropolitan Government.
1. Car Tax/ Light Vehicle Tax
Car tax is a tax levied according to the displacement of a car. Car owners as of April 1 will be obliged to pay for one year. In addition, due to the tax reform in October 2019, the tax amount will change depending on the time of purchase. This is the latest value.
| Engine Displacement | Tax (yen) ※Åfter Oct 2019 |
| Light Vehicle | 10,800 |
| 1000cc or less | 25,000 |
| 1000cc ~ 1500cc or less | 30,500 |
| 1500cc ~ 2000cc or less | 36,000 |
| 2000cc ~ 2500cc or less | 43,500 |
| 2500cc ~ 3000cc or less | 50,000 |
| 3000cc ~ 3500cc or less | 57,000 |
| 3500cc ~ 4000cc or less | 65,500 |
| 4000cc ~ 4500cc or less | 75,500 |
| 4500cc ~ 6000cc or less | 87,000 |
| 6000cc ~ | 110,000 |
2. Car Weight Tax
Car weight tax is levied according to the weight of the car, and the amount of tax varies depending on the number of years since the purchase of the car.
At the timing of the vehicle inspection, you have to pay for the validity period of the vehicle inspection (3 years for the first time, 2 years after that) in a lump sum.
For private cars, the tax amount changes for every 0.5 tons of vehicle weight. The tax amount for light vehicles is fixed regardless of the weight of the vehicle.
Moreover, the tax amount will increase 13 years or more after the new registration of a new car and will increase further after 18 years or more.
You can calculate the car weight tax on this website just by filling your car number in, which is written on your car inspection certificate.
3. Car Acquisition Tax
Car Acquisition Tax was renamed to Environmental Performance Discount in 2019. This tax is imposed when purchasing both a new and a used car. As shown below, the tax rate differs depending on the environmental performance of the car.
| Normal Car | Tax Rate |
| Electric Car | None |
| ★★★★ and Achieve the fuel efficiency standard in 2020 + 20% | None |
| ★★★★ and Achieve the fuel efficiency standard in 2020 + 10% | 1.0% |
| ★★★★ and Achieve the fuel efficiency standard in 2020 | 2.0% |
| Others | 3.0% |
| Light Vehicle | Tax Rate |
| Electric Car | None |
| ★★★★ and Achieve the fuel efficiency standard in 2020 + 10% | None |
| ★★★★ and Achieve the fuel efficiency standard in 2020 | 1.0% |
| Others | 2.0% |
4. Consumption Tax
Consumption Tax is always levied when you buy goods or services, not just cars. The tax rate is 10% as of 2021.
In addition to the price of the vehicle itself, it is also levied on options and accessories.
How Can I Pay Car (Vehicle) Taxes in Japan
In many areas, payment slips will be sent to the address listed on the vehicle verification during May, and in some areas in April or June. As a general rule, the deadline for payment of car tax is May 31 for both ordinary cars and light vehicles.
However, if May 31st is Saturdays, Sundays, and holidays, it can be extended until the beginning of June (exceptionally, only in Aomori and Akita prefectures, the payment deadline is the end of June).
You can pay at a financial institution or a convenience store. Cash and bank transfer are preferable. In recent years, the number of areas where payment procedures can be made by electronic payment is increasing.
When paying the car tax with a credit card, you will be charged the payment fee.
Ways to lower Car (Vehicle) Taxes in Japan
Car tax and light vehicle tax vary depending on the period of ownership of the vehicle, the time of purchase, and the type of vehicle purchased. Here, we will explain how to save car tax and light vehicle tax.
1. Use eco-car tax reduction
Eco-car tax reduction is a system to support switching to a car with excellent environmental performance. Car tax, light vehicle tax, and car weight tax will be reduced compared to ordinary vehicles depending on the degree of achievement of fuel efficiency standards.
3. Buy a new car
Keeping a car on for a long time is a tax disadvantage. This is because the car tax and light vehicle tax will be increased by about 15% for vehicles that have been registered for 13 years.
In addition, the car weight tax will increase, resulting in an increase in maintenance costs.
However, hybrid cars will not be subject to this extra charge even after 13 years.
3. Timing
When purchasing a light vehicle, you can avoid paying the light vehicle tax for that year by purchasing it after April 1, which is the final date of the car tax and light vehicle tax.
Delinquency for Car (Vehicle) Tax
If you fail to pay the car tax, there are penalties such as the occurrence of delinquent charges and the suspension of convenience store payments.
If the delinquency continues in that state, there is a risk that the car inspection will not be passed or the assets will be seized.
How can I compensate for the delinquency?
When the car tax is delinquent, the payment differs depending on whether it is within the payment deadline, outside the payment deadline, or when a reminder is received. I will explain those payment methods.
Before the payment deadline
There is no problem if you pay within the payment deadline.
After the payment deadline
After the payment deadline, you need to call the number on the payment slip to have the payment slip re-sent.
If you receive a reminder
You will receive this reminder several times after the due date. If you do not pay for this, a notice of seizure will be sent and your salary will be seized, etc.
Other options to use a car
In case you want to own a car but you don’t want to pay such taxes or you don’t plan to stay in Japan, car leasing or car-sharing can be good options for you.
Unlike rental cars, you can use them whenever you like so you can use the car as if it’s yours. Taxes are also included in the price, so there is no need for these troublesome procedures.
Car Tax Can Be Expensive in Japan.
There are many types of car taxes, and the prices are not cheap. However, if you own an eco-friendly car, you can get various discounts. Thus, if you are not particular about it, we recommend such a car. It’s not a cheap tax, but pay it well and enjoy a comfortable car life.
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