South Korea will introduce light green license plates for vehicles that companies use for official purposes to prevent private use of these cars to take advantage of corporate tax benefits and cost reductions, according to the Ministry of Land, Infrastructure and Transport on Tuesday.

The license plate is expected to be introduced as early as in July after the transport ministry holds a public hearing. The introduction of a different license plate for passenger vehicles registered under corporate names was a pledge made by President Yoon Suk-yeol during this campaign.

In South Korea, the number of new cars registered have decreased by an annual average of 1.3 percent over the past five years, but vehicles under corporate names have increased by 2.4 percent during the same period. Among the newly registered passenger cars under corporate names between 2018 and 2022, 71.3 percent had an acquisition value between 100 million and 400 million won ($324,000). More than 88 percent of cars worth more than 400 million won belonged to corporations. As of 2021, the number of corporate passenger cars totaled 2.35 million.

In a public survey conducted by the ministry, 84 percent of respondents supported the introduction of the new license plates for corporate vehicles. The ministry set vehicles subject to new corporate license plate registration to commercial passenger cars, excluding vans, trucks and special purpose vehicles.

The ministry plans to induce the license plate replacement by providing tax benefits only when a new registration plate is attached to existing corporate vehicles.

By Lee Jong-hyuk and Minu Kim

[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]