A guide to tax structure for new cars and deregistration value

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A guide to tax structure for new cars and deregistration value

Here's a guide that helps you understand how the taxation for new cars work, as well as the calculations of the de-registration value.

Category: Car Buying Advice

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

Tax Structure for new cars

Date COE is obtained:	May 2002 - February 2004	March 2004 - February 2008	March 2008 - February 2013	2013 onwards
Registration Fee (RF)	$220	$220	$220	$220
Additional Registration Fee (ARF)	130% of OMV	110% of OMV	100% of OMV	Tiered Rate

Cars, which are registered with Certificates of Entitlement (COEs) obtained from March 2013 onwards will be subjected to a tiered ARF system. An example based on a car with an Open Market Value (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

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 and dealer's profits are imposed.

Vehicular Emissions Scheme (VES)

In addition, the National Environment Agency (NEA) will introduce the Vehicular Emissions Scheme (VES) to replace the Carbon Emissions-Based Vehicle Scheme (CEVS) for all new cars, taxis and newly imported used cars with effect from 1^st January 2018.

	Co2 (g/km)	HC (g/km)	CO (g/km)	NOx (g/km)	PM (mg/km)	Rebate/surcharge cars ($)	Rebate/surcharge taxis ($)
A1	A1 ≤ 90	A1 ≤ 0.020	A1 ≤ 0.150	A1 ≤ 0.007	A1 = 0.0	-20,000	-30,000
A2	90 < A2 ≤ 125	0.020 < A2 ≤ 0.036	0.150 < A2 ≤ 0.190	0.007 < A2 ≤ 0.013	0.0 < A2 ≤ 0.3	-10,000	-15,000
B	125 < B ≤ 160	0.036 < B ≤ 0.052	0.190 < B ≤ 0.270	0.013 < B ≤ 0.024	0.3 < B ≤ 0.5	0	0
C1	160 < C1 ≤ 186	0.052 < C1 ≤ 0.075	0.270 < C1 ≤ 0.350	0.024 < C1 ≤ 0.030	0.3 < C1 ≤ 2.0	+10,000	+15,000
C2	C2 > 185	C2 > 0.075	C2 > 0.350	C2 > 0.030	C2 > 2.0	+20,000	+30,000

Deregistration value

[COE rebate + PARF rebate] = Deregistration value

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

*Note that COE cars (10 years and older) 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 deregistered 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 $38,000 and expires on 5^th June 2020 but was deregistered on 2^nd January 2018.

Unused period of the COE:

From 3^rd January 2018 to 5^th June 2020 = 2 years, 5 months and 3 days
= 29.1 months

Therefore, COE Rebate = ($38,000 x 29.1) / 120 = $9,215

PARF rebate

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

Age of vehicle at deregistration	PARF rebate (COE May 2002 onwards)
Not exceeding 5 years	75% of ARF paid
Above 5 years but not exceeding 6 years	70% of ARF paid
Above 6 years but not exceeding 7 years	65% of ARF paid
Above 7 years but not exceeding 8 years	60% of ARF paid
Above 8 years but not exceeding 9 years	55% of ARF paid
Above 9 years but not exceeding 10 years	50% of ARF paid
Above 10 years	NA

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 of your vehicle. To fully calculate your PARF rebate, you need to know how ARF value is calculated, which is explained below.

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.