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26 Feb 2013 | Text by Akram Saheed and Siddiq | Category: Car Buying Advice

Here's a guide that helps you understand how the taxation for new cars work, and how to calculate the de-registration value of your vehicle and the relationship between OMV & ARF.

Tax Structure for New Cars

New cars registered in Singapore will be subjected to Government taxes, which comprise of Registration Fee (RF) and Additional Registration Fee (ARF).

  Cars registered with COEs obtained between May 2002 & February 2004 Cars registered with COEs obtained between March 2004 & February 2008 Cars registered with COEs obtained between March 2008 & February 2013 Cars registered with COEs obtained from March 2013 onwards
Registration
Fee (RF)
$140
Additional
Registration
Fee (ARF)
130 % of OMV 110% of OMV 100% of OMV Tiered Rate

Cars which are registered with COEs obtained from March 2013 onwards will be subjected to a tiered ARF system. An example based on a car with an OMV of $75,000 is illustrated in the following:

Vehicle OMV ($75,000) ARF Rate ARF Payable
First $20,000 100% 100% x $20,000 = $20,000
Next $30,000 140% 140% x $30,000 = $42,000
Above $50,000 180% 180% x $25,000 = $45,000

The total ARF payable in this case is ($20,000 + $42,000 + $45,000) = $107,000

In addition, new and imported cars registered from 1st January 2013 will also be subjected to the Carbon Emissions-Based Vehicle Scheme (CEVS), in which cars with low carbon emissions will receive tax rebates, while those with higher carbon emissions will be liable for surcharge.

De-registration value / Paper Value

You must have heard of the term 'de-registration value' or also known as 'paper value' being thrown around when the casual chat of cars arises between friends or colleagues. More often than not, you would be surprised at the innocence of many local motorists who do not know what it actually means.

What is De-registration value?

[COE rebate + PARF rebate] = De-registration value

The de-registration value simply refers to the returns you are entitled to from the Land Transport Authority (LTA) when you de-register your vehicle. The de-registration value is calculated based on the COE rebate and the PARF rebate value of your car.

*Do note that COE cars (cars more than 10 years old) do not have any PARF Rebate, therefore the de-registration value for COE cars are based on the Prevailing Quota Premium paid.


COE Rebate

If a vehicle is de-registered before the end of the 10-year COE cycle, the registered owner can be granted a rebate based on the number of months and days remaining on his vehicle's COE.

COE Rebate = (Quota Premium Paid x Number of months left) / 120 months

For example if your COE costs $16,897 and expires on the 5th June 2015 but was de-registered on the 2nd January 2013.

Unused period of the COE:

From 3/1/2013 to 5/6/2015 = 2 years, 5 months and 3 days
= 29.1 months

Thus COE Rebate = ($16,897 x 29.1) / 120 = $4,097


PARF Rebate

Calculating the PARF rebate value of your car is relatively simple as there are only two factors contributing to the PARF rebate value - age of vehicle and ARF value.

Age of vehicle PARF Rebate (A)

(For cars registered with COEs obtained before May 2002 tender)
PARF Rebate (B)

(for cars registered with COEs obtained from May 2002 tender onwards)
Less than 5 yrs old 130% of ARF 75% of ARF
5 to 6 yrs old 120% of ARF 70% of ARF
6 to 7 yrs old 110% of ARF 65% of ARF
7 to 8 yrs old 100% of ARF 60% of ARF
8 to 9 yrs old 90% of ARF 55% of ARF
9 to 10 yrs old 80% of ARF 50% of ARF
More than 10 yrs old 0% of ARF 0% of ARF

As you can refer from the table above, the PARF rebate is a certain percentage of your ARF value – which is based on the OMV (Open Market Value) of your vehicle. To fully calculate your PARF rebate, you need to know how ARF value is calculated, which is explained below.


Relation between ARF & OMV

OMV is assessed by the Singapore Customs and in general - is the actual price of the vehicle before all taxes and surcharges like COE, GST, Registration Fee, ARF, dealer's profit are imposed.

From the Budget Statement 2013 announced in February 2013, the ARF (Additional Registration Fee) value follows a tiered structure, depending on the OMV of your vehicle.

Vehicle OMV ARF Rate
First S$20,000 100%
Next S$30,000
(i.e. S$20,001 to S$50,000)
140%
Above S$50,000 180%

  • For cars with an OMV value of up to $20,000, the ARF value is at 100 percent of OMV value.

    ARF = OMV


  • For cars with an OMV value between $20,001 to $50,000 the ARF rate will be 140 percent of
    incremental OMV.

    [(OMV - $20,000) x 140%] + $20,000 = ARF

    For example if the OMV of a vehicle is $30,000, the ARF is valued at $34,000


  • For cars with an OMV above $50,000, the ARF value is 180 percent of incremental OMV.

    [(OMV - $50,000) x 180%] + $62,000 = ARF

    For example, if the OMV of a vehicle is $75,000, the ARF is valued at $107,000

    *The above ARF calculation do not take into account the Carbon Emissions-Based Vehicle Scheme (CEVS)
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