Transport Department - First Registration Tax Concessions for Electric Vehicles

The Government announced on 24 February 2021 to amend the first registration tax (FRT) concession arrangement for electric vehicles (EV). The latest details of the concession arrangement are as follows –

(a)

For electric private cars (e-PCs):

except for eligible private car (PC) owners (see (a)(ii) below), FRT for e-PCs will be waived up to $97,500 from 1 April 2018 to 31 March 2024 (remains the same).

ii.

the "One-for-One Replacement" Scheme is effective from 28 February 2018 to 31 March 2024, allowing PC owners who arrange to scrap and de-register their own eligible old PC¹ ("Old PC") (PC with an internal combustion engine or e-PC) and then first register a new e-PC ("Replacement e-PC") to enjoy a higher FRT concession. The latest concession cap is $287,500, which is applicable only to "One-for-One Replacement" Scheme applications in which the "Replacement e-PC" is subject to payment of FRT according to the new tax rates proposed in the 2021-22 Budget² . Otherwise, the maximum concession granted under the "One-for-One Replacement" Scheme would be the previous amount, i.e. $250,000.

(b)

For other types of EVs (i.e. electric commercial vehicles, electric motor cycles and electric motor tricycles): their FRT is waived in full from 1 April 2018 to 31 March 2024 (remains the same).

Click here to access the website of the Environmental Protection Department for more details on promoting the use of EVs.

¹Eligibility criteria include – (i) the "Old PC" must have been first registered in Hong Kong for at least 6 years when its registration is cancelled owing to scrapping; (ii) the vehicle owner participating in the "One-for-One Replacement" Scheme must have been the registered owner of the "Old PC" for 18 months or more, without interruption; (iii) the "Old PC", with or without interruption, must have been licensed for at least 10 months (i.e. 304 days or more), within the 12 months immediately before its de-registration. [Items (ii) and (iii) are the eligibility criteria revised on 28 January 2019; if the "Old PC" fulfills the eligibility criteria before or after the revision, and the other remaining eligibility criteria under the Scheme, it is eligible to participate in the Scheme.]
²In the 2021-22 Budget, it was proposed to amend the Motor Vehicles (First Registration Tax) Ordinance to increase the FRT for PCs by 15%. In accordance with the Public Revenue Protection (Revenue) Order 2021, all PCs that are on order from the registered distributors / registered importers or have been arranged for shipment to Hong Kong by the vehicle owners (applicable to PCs imported for personal use) at or after 11:00am on 24 February 2021 are subject to FRT at the new rates, if these are intended for submission for application for first registration. For details of the tax rates for calculation of FRT, please visit this page .

"One-for-One Replacement" Scheme (Eligibility criteria revised with effect from 28 January 2019)

Registered owner of PCs may consider joining the "One-for-One Replacement" Scheme by arranging to scrap and de-register his/her "Old PC" and then first registering a "Replacement e-PC" under his/her own name within the effective period of the Scheme (i.e. 28 February 2018 to 31 March 2024, both dates inclusive), if the eligibility criteria for the Scheme are fully met.

[Please note that the revised eligibility criteria are only applicable to "One-for-One Replacement" Scheme applications and first registration applications of corresponding "Replacement e-PCs" submitted from 28 January 2019 to 31 March 2024 (both dates inclusive) ]

Procedures for participating in the "One-for-One Replacement" Scheme

Key steps consist of the following -

(i)

Checking eligibility of the "Old PC" concerned for the Scheme;

(ii)

Arranging to scrap the "Old PC" concerned;

(iii)

Completing de-registration of the "Old PC" concerned; and

(iv)

Submitting first registration application for the "Replacement e-PC" and application for higher FRT concession for the "Replacement e-PC" under the Scheme.

For step (iv), according to the Motor Vehicles (First Registration Tax) Ordinance (Cap 330), before a motor vehicle is first registered, the registered distributor / registered importer who is selling the vehicle, or the person who is applying for vehicle first registration (where the motor vehicle is imported other than a registered importer) is liable to pay the FRT. Therefore,

if the "Replacement e-PC" is purchased from a registered distributor / registered importer - the application under the "One-for-One Replacement" Scheme shall be made by the registered distributor / registered importer selling the "Replacement e-PC"; or
if the "Replacement e-PC" is imported by the owner for personal use in Hong Kong - the application under the "One-for-One Replacement" Scheme shall be made by the owner.

The eligibility criteria and application procedures for the "One-for-One Replacement" Scheme are detailed in the information note "How to Participate in the "One-for-One Replacement" Scheme for Higher First Registration Tax Concession for Electric Private Cars", which can be downloaded here.

We urge PC owners who intend to participate in the "One-for-One Replacement" Scheme to read the abovementioned document carefully to comprehend the eligibility criteria and application procedures of the Scheme before arranging to scrap their existing PCs. If a PC owner is not certain whether his / her PC fulfill the eligibility criteria of the Scheme, he / she shall make an enquiry to us. The enquiry channels are detailed in Frequently Asked Question No. 1 below.

Application form for the "One-for-One Replacement" Scheme

The application form for the "One-for-One Replacement" Scheme can be downloaded here. For enquiries, please call Hong Kong Licensing Office of the Transport Department at 2804 2270 or the 1823 Call Centre.

Frequently asked questions

Q1	How can I know whether my existing PC is eligible for joining the "One-for-One Replacement" Scheme?
A1	You may refer to the "Date of First Registration" and "Date registered as Owner" as shown on the Vehicle Registration Document (VRD) for calculating the current age and current ownership period of the "Old PC". If you would like to know the length of licensed period of the "Old PC" in the last 12 months, you can make an enquiry by e-mail (Address: hklo@td.gov.hk) or in writing (Address: 3/F, United Centre, 95 Queensway, Admiralty, Hong Kong; Attention: Executive Officer/First Registration Tax), accompanied with the digital image or photocopy of the VRD (with signature of the registered owner) of the "Old PC".

Q2	Is there any limit for the number of applications under the "One-for-One Replacement" Scheme involved by a vehicle owner / an applicant?
A2	No.

Q3	Is there any FRT exemption / concession for petrol / electric hybrid cars?
A3	The FRT concessions announced in the Financial Secretary's 2018-19 Budget Speech only applies to vehicles propelled solely by electric power and do not emit any exhaust gas. Since petrol / electric hybrid cars are not propelled solely by electric power, they are not entitled to the related FRT concessions.

Q4	How can I arrange to scrap my existing PC?
A4	You may make use of the services provided by vehicle scrapping companies for scrapping your existing PC. You are reminded to request a scrapping certificate issued by the vehicle scrapping company, which shall contain the following - chassis number and registration mark of the scrapped vehicle; date and location of vehicle scrapping; name and Business Registration Certificate number of the scrapping company; and signature by the representative of the scrapping company, with company chop.

Q5	After my existing PC is scrapped, what should I do to de-register it?
A5	After your existing PC is scrapped, you should submit to the Licensing Office of the Transport Department the duly signed and completed "Notification for Cancellation of Vehicle Registration" (form TD184) which can be downloaded here, or "Application to Transfer or Retain a Vehicle Registration Mark" (form TD129) which can be downloaded here if you wish to retain the registration mark of the scrapped PC at the same time, with required documents for de-registering the PC.

Q6	Can I scrap and de-register the existing PC registered under my name and allow my relative / friend to use this PC for participating in the "One-for-One Replacement" Scheme?
A6	No. The "Replacement e-PC" must be first registered under the name of the registered owner of the "Old PC" when the latter is scrapped and de-registered for enjoying the higher FRT concession under the "One-for-One Replacement" Scheme.

Q7	If my PC was scrapped / de-registered before 28 February 2018, can I participate in the "One-for-One Replacement" Scheme?
A7	No. The scrapping and de-registration of the "Old PC", and submission of first registration application for the "Replacement e-PC" must be carried out between 28 February 2018 and 31 March 2024 for the higher FRT concession under the "One-for-One Replacement" Scheme.

Q8	Can I apply for first registering the "Replacement e-PC" before scrapping and de-registering my existing PC under the "One-for-One Replacement" Scheme?
A8	No. Under the "One-for-One Replacement" Scheme, the de-registration date of the "Old PC" must not be after the submission date of the "Replacement e-PC" first registration application. The period between the two dates, which must be between 28 February 2018 and 31 March 2024, must not exceed 3 months.

Q9	If I purchase an e-PC from a registered distributor to replace my existing PC, can I make an application for higher FRT concession under the "One-for-One Replacement" Scheme to the Transport Department direct?
A9	No. If the "Replacement e-PC" is purchased from a registered distributor, the application under the "One-for-One Replacement" Scheme must be made by the registered distributor selling the "Replacement e-PC".

Q10	I plan to import an e-PC into Hong Kong for use, what are the procedures?
A10	Please refer to the Guidelines for Importation and Registration of Pure Electric Vehicle (PEV) and Plug-in Hybrid Electric Vehicle (PHEV) for details, which can be accessed here.

Q11	How is the FRT payable for a "Replacement e-PC" under the "One-for-One Replacement" Scheme calculated?
A11	Under the new FRT rates for PCs proposed in the 2021-22 Budget (46% on the first $150,000 of vehicle taxable value, 86% on the next $150,000, 115% on the next $200,000 and 132% on the remainder), if the "Replacement e-PC" is granted the higher FRT concession and its taxable value is not higher than $377,826, no FRT will be payable upon its first registration. For a "Replacement e-PC" with taxable value higher than $377,826, the FRT payable will be worked out by- taxable value x new FRT rates - $287,500 Example: the taxable value of the "Replacement e-PC" is $500,000, if it is granted the higher FRT concession, the amount of FRT payable will be = [($150,000 x 46% + $150,000 x 86% + $200,000 x 115%) - $287,500] = $428,000 - $287,500 = $140,500

Q12	If I ordered an e-PC before the new FRT rates proposed in the 2021-22 Budget took effect but joined the "One-for-One Replacement" Scheme thereafter, how is the FRT payable for the "Replacement e-PC" calculated?
A12	In accordance with the Public Revenue Protection (Revenue) Order 2021, all PCs that are on order from the registered distributors / registered importers or have been arranged for shipment to Hong Kong by the vehicle owners at or after 11:00am on 24 February 2021 are subject to FRT at the new rates, if these are intended for submission for application for first registration. At the same time, the Government will implement a one-time arrangement under which PCs on order from the registered distributors / registered importers or have been arranged for shipment to Hong Kong by the vehicle owners (only applicable to PCs imported for personal use) before 11:00am on 24 February 2021 may apply for exemption from the new FRT rates (i.e. paying FRT according to the previous rates). Registered distributor / registered importer / vehicle owner shall submit the Application for Paying Motor Vehicles First Registration Tax at Previous Tax Rates for a Private Car with relevant documentary proof when submitting the application for first registration. If the application is approved by the Transport Department, the previous FRT rates will be applicable to the PC concerned. If the "Replacement e-PC" is exempted from paying FRT at the new FRT rates, then this "Replacement e-PC" can only enjoy the previous concession cap under the "One-for-One Replacement" Scheme, i.e. $250,000. Under such circumstances, if the "Replacement e-PC" is granted the higher FRT concession and its taxable value is not higher than $377,500, no FRT will be payable upon its first registration. For a "Replacement e-PC" with taxable value higher than $377,500, the FRT payable will be worked out by- taxable value x previous FRT rates - $250,000 Example: the taxable value of the "Replacement e-PC" is $500,000, if it is granted the higher FRT concession, the amount of FRT payable will be = [($150,000 x 40% + $150,000 x 75% + $200,000 x 100%) - $250,000] = $372,500 - $250,000 = $122,500

Q13	My "Replacement e-PC" under the "One-for-One Replacement" Scheme is granted the amount of FRT concession less than the cap level of $287,500 (say, amount of FRT concession granted is $267,000). Can the "Replacement e-PC" still enjoy the "unused" FRT concession (i.e. $20,500) if I fit optional accessories to / obtain taxable warranties for the "Replacement e-PC" within 6 months after its first registration?
A13	Yes. If the amount of FRT concession granted to a "Replacement e-PC" under the "One-for-One Replacement" Scheme is lower than the cap level of $287,500 (applicable to "Replacement e-PCs" subject to the new FRT rates), the "unused" amount of FRT concession will be taken into account for calculating the additional FRT payable upon fitting optional accessories to / obtain taxable warranties for the "Replacement e-PC" within 6 months after its first registration. Example - the taxable value of the "Replacement e-PC" is $360,000, if it is granted the higher FRT concession, the FRT concession will be $267,000, i.e. no FRT is payable upon first registration. If accessories of value of $50,000 are fitted to the "Replacement e-PC" within 6 months after its first registration, the amount of payable additional FRT will be = [($50,000 x 115%) - $20,500] = $57,500 - $20,500 = $37,000

Q14	What should I do if the registered distributor is not willing to submit the application under the "One-for-One Replacement" Scheme for the "Replacement e-PC" I purchased?
A14	The Transport Department has presented the details of the "One-for-One Replacement" Scheme to registered distributors who sell e-PCs, and explained to them that they shall submit applications under the "One-for-One Replacement" Scheme for the eligible "Replacement e-PCs" they sell. The vehicle owner concerned can contact Hong Kong Licensing Office of Transport Department (tel: 2804 2270) for follow-up if the registered distributor refuses to submit applications under the "One-for-One Replacement" Scheme.

Q15	What should I do if I could not enjoy the higher FRT concession in full from the "One-for-One Replacement" Scheme?
A15	The vehicle owner concerned can contact Hong Kong Licensing Office of the Transport Department (tel: 2804 2634) for follow-up.

Q16	My new e-PC was first registered before 28 January 2019 and enjoyed the FRT concession of $97,500. My "Old PC" now fulfills the revised eligibility criteria of the "One-for-One Replacement" Scheme, which took effect from 28 January 2019. Can I submit my application to enjoy a higher FRT concession (difference between $287,500 and $97,500)?
A16	No. The revised eligibility criteria are only applicable to "One-for-One Replacement" Scheme applications and first registration applications of corresponding "Replacement e-PCs" submitted from 28 January 2019 to 31 March 2024 (both dates inclusive).

Q17	My "Old PC" fulfills the eligibility criteria of the "One-for-One Replacement" Scheme before the revision effective from 28 January 2019, can I submit my application to enjoy the higher FRT concession?
A17	Yes. The objective of revising the eligibility criteria of the "One-for-One Replacement" Scheme is to benefit more vehicle owners. If your "Old PC" fulfills the eligibility criteria before or after the revision, and the other remaining eligibility criteria under the Scheme, you can participate in the Scheme.

Q18	When I renewed my vehicle licence, I have made a declaration on page 2 of the Application for Renewal of Vehicle Licence (TD558) to apply for waiving the additional fee incurred from the usage of the vehicle during the unlicensed period. Is the unlicensed period indicated in the declaration counted towards the licensed period in Criteria (d) of the "One-for-One Replacement" Scheme?
A18	No. Completing the above declaration is for waiving the additional fee incurred from the usage of the vehicle during the period after the last licence expires and the new licence becomes operative. The unlicensed period with the additional fee waived is not counted towards the licensed period required in Criteria (d) of the "One-for-One Replacement" Scheme.

Q19	I paid the additional fee for the unlicensed period when I renewed my vehicle licence. Is the period covered by the additional fee regarded as "relicensed" the vehicle? Is that period counted towards the licensed period in Criteria (d) of the "One-for-One Replacement" Scheme?
A19	No. Payment of the additional fee does not mean that the vehicle is licensed for the period which such fee is charged. TD cannot "relicense" a vehicle for an unlicensed period in the past. In this connection, even if the additional fee is paid, the period covered by the additional fee is considered unlicensed, therefore, such period is not counted towards the licensed period in Criteria (d) of the "One-for-One Replacement" Scheme.