As of 2024, the “environmental performance levy” is a tax that is levied when purchasing or owning a car. Starting October 1, 2019, the automobile acquisition tax will be abolished and the “environmental performance levy” will be introduced. Since the name sounds like a discount on the forehead, some people may not think that it will be levied when purchasing a car, but any car model that does not meet the standard will incur a fee. Hybrid cars are exempt, but you can expect to incur a fee if you purchase a gasoline-powered car.
Environmental performance (private car)
If you acquire a vehicle between April 1, 2023 (Reiwa 5) and March 31, 2026 (Reiwa 8), a tax rate based on the vehicle’s environmental performance will be levied on the acquisition price. (This rate has been updated many times.) The tax amount changes each year depending on fuel efficiency. It is becoming stricter every year.
If you purchase a new car after January 2024
Environmental performance tax rate for private passenger cars (if acquired between January 1, 2024 and March 31, 2025)
| Fuel efficiency, etc. | Ordinary car | Light vehicle |
|---|---|---|
| Electric vehicles (PHEVs), etc. |
Tax exemption | Tax exemption |
Achieve 85% of the 2030 fuel efficiency standard |
Tax exemption | Tax exemption |
Achieve 80% of the 2030 fuel efficiency standard |
1.0% | Tax exemption |
Achieve 70% of the 2030 fuel efficiency standard |
2.0% | 1.0% |
| Other than the above | 3.0% | 2.0% |
If you purchase a new car after January 2025
Environmental performance tax rate for private passenger cars (if acquired between January 1, 2025 and March 31, 2026)
| Fuel efficiency, etc. | Ordinary car | Light vehicle |
|---|---|---|
| Electric vehicles (PHEVs), etc. |
Tax exemption | Tax exemption |
Achieve 95% of the 2030 fuel efficiency standard |
Tax exemption | Tax exemption |
Achieve 85% of the 2030 fuel efficiency standard |
1.0% | Tax exemption |
Achieve 80% of the 2030 fuel efficiency standard |
2.0% | Tax exemption |
Achieve 75% of the 2030 fuel efficiency standard |
2.0% | 1.0% |
| Other than the above | 3.0% | 2.0% |
Environmental performance discount used cars
Not only new cars, but also used cars are subject to the environmental performance tax. The calculation method is different from that for new cars, and is calculated by multiplying the “taxable base amount” by the “residual value rate” in the table below according to the number of years since the purchase. The longer the age of a used car, the lower the residual value rate. Used cars with an acquisition price of less than 500,000 yen are not subject to the environmental performance tax.
Environmental performance percentage used car calculation formula
Acquisition price = Taxable base amount x Residual value rate
Environmental performance levy Residual value rate
The calculation is made using the “residual value rate” published by the Ministry of Internal Affairs and Communications .
| Number of years passed | Ordinary car | Light vehicle |
|---|---|---|
| 1 year | 0.681 | 0.464 |
| 1.5 years | 0.561 | 0.316 |
| 2 years | 0.464 | 0.215 |
| 2.5 years | 0.382 | 0.146 |
| 3 years | 0.316 | 0.100 |
| 3.5 years | 0.261 | – |
| 4 years | 0.215 | – |
| 4.5 years | 0.177 | – |
| 5 years | 0.146 | – |
| 5.5 years | 0.121 | – |
| 6 years or more | 0.100 | – |
The Japan Used Car Dealers Association (JU Chuhanren, Chairman Kaizu Hiroshi) has recently launched a search service on its website to automatically calculate the automobile tax environmental performance levy amount for used car sales, using data provided by the Japan Automobile Manufacturers Association (hereinafter referred to as JAMA).
Automobile tax environmental performance tax amount search service *Used cars
https://www.jucda.or.jp/tax/kankyouseinouwari/
Five types of car taxes
Currently, there are five main types of taxes levied on cars . The tax system underwent major revisions in 2019, with the “Automobile Acquisition Tax” being abolished and replaced by an “Environmental Performance Tax.”
Automobile tax / Light vehicle tax (at the time of vehicle purchase) (once a year)
Environmental performance tax (at the time of vehicle purchase)
Automobile weight tax (at the time of vehicle purchase) (at the time of vehicle inspection)
Consumption tax (vehicle inspection, vehicle, fuel, maintenance)
Gasoline tax/diesel transaction tax (refueling)
If you would like to know more about other taxes, please see the following page.
▼For more details, please refer to this article.
→ [2024] List of car tax types: “Automobile Tax”, “Weight Tax”, and “Environmental Performance Tax”
Tokyo Metropolitan Government Tax Bureau
https://www.tax.metro.tokyo.lg.jp/kazei/car_kankyou.html
Ministry of Land, Infrastructure, Transport and Tourism
