(I) The following forms of transportation equipment are exempt from the vehicle license tax.

• Vehicles which are classified under the military transportation category.
• Vessels on which tonnage levies have already been collected by customs houses which are navigating within the jurisdiction of the said customs house.
• Specially equipped vehicles intended for maintaining public safety, such as police squad cars, detective and investigation unit vehicles, vehicles used for transporting prisoners, fire engines, specialized rescue vehicles and ocean rescue vehicles...etc.
• Specially equipped and marked vehicles belonging to public hospitals or other public organizations and used exclusively for public health purposes, such as ambulances, hospital vehicles, water spraying vehicles, sewage trucks, garbage trucks...etc.
• Vehicles given to diplomats and personnel who enjoy diplomatic privileges, provided that approval has been granted by the Ministry of Foreign Affairs and special licenses have been obtained from the transportation authorities.
• Specially marked or equipped transportation vehicles used exclusively for transport of mail.
• Specially marked or equipped vehicles which are used exclusively for promoting education and culture.
• One vehicle owned and used only by the mentally or physically disabled that has an identified document issued by the authorities and driving license, limited to only one vehicle per person. However, for the mentally or physically disabled, who can't get a driving license but has been approved by the Transportation Authorities, the vehicle shall be issued to one per household.
• Vehicles legitimately registered and used by social welfare organizations and institutions that have been authorized by local authorities, limited to three vehicles per organization or institution.
• Buses and vehicles used exclusively for public mass transportation and owned by enterprises of the highway bus industry or urban district bus industry, where these enterprises have been approved by the Transportation Authorities.
• Transportation vehicles used in special offshore development areas and carry a valid local registration; however, sedans that carry an exhaust rating exceeding 1800 c.c. are excluded.

　　All vehicles listed above which are exempt from the vehicle license tax levy, shall be required to follow the procedure and apply for exemption of the vehicle license tax before operation of such vehicles. No such vehicles may be resold, transferred, modified, or changed their designated usage, unless otherwise approved by the transportation authorities.

(II) Procedures on tax exemption for vehicles applied by mentally or physically handicapped/disabled

1. Vehicles operated by mentally or physically handicapped are exempt from the vehicle license tax; however owner is required to submit the following documents to a local tax collection agency.
   1. A licensed mentally or physically handicapped vehicle owner is limited to apply for only one vehicle, and is required to submit the following mandated documentation in the filing procedure.
      • A mentally or physically handicapped identification document.
      • A vehicle registration owned by a mentally or physically handicapped.
      • A valid driver's license.
      • Personal endorsement seal/stamp of the vehicle owner.
      • An application filed in between tax levying periods is required to pay the tax due from January 1st to the date the application; those who have already paid the entire year's tax due on an application filed after the tax deadline may file a tax refund for the period from the date of application filed to the year-end.
   2. A mentally or physically handicapped individual who does not possess a driver's license will be eligible to obtain a permit limited to one vehicle per household.  Required documenters are,
      • A mentally or physically handicapped identification document.
      • A valid vehicle registration.
      • A copy of the household registry.
      • The personal endorsement seal/stamp of the vehicle owner.
      • An application filed in between tax levying periods is required to pay the tax due from January 1st to the date the application; those who have already paid the entire year's tax due on an application filed after the tax deadline may file a tax refund for the period from the date of application filed to the year-end.
      • The address submitted for vehicle registration shall be identical to the household registry. The vehicle owner shall be enlisted under the same household as the mentally or physically handicapped individual, and it must be blood-related relative.
2. As per provisions cited in subheading 8, Par 1, Article 7 of the Vehicle License Law, if a vehicle operated by mentally or physically handicapped individual with a valid driver's license for business purposes (such as an independent tax cab), are still eligible to the exemption of vehicle license tax; however, the exemptive clause of the same law does prohibit such adaptation. (as per an interpretation by the Ministry of Finance, MOF No. 881896591, announced on Jan. 21, 1998)

(III) Tax exemption on garbage trucks operated by village, township or city hall. Specially equipped and marked garbage trucks for maintaining public health operated by the town hall of a municipal village, townships are exempt from the tax levy. When applying for the tax exemption, please bring transportation authorities' approved documents, new license registration, vehicle registration, photos, and a completed application form to a local tax collection authority for a permit to be issued.

(IV) Tax exempt vehicles are not required to file annually In an effort to simplify the process, if a vehicle with a tax exemption status does not modify or change its intended usage is exempt from filing a tax exemption form on an annual basis. (as per interpretation by the Ministry of Finance, reference MOF No. 770652065, announced on Feb. 24, 1988) The change of its intended usage or purpose refers to cases such as a public bus modified into a tour bus and so forth. It is essential to change a vehicle's registration immediately once a tax exempt vehicle has been modified for a different usage, which would make it taxable as it no longer qualifies for tax exemption.

II. Tax Deductions

1. Tax refund may be obtained on tax overpayment for vehicles' status change
   A stolen vehicle should be reported to police authorities at once. A stolen vehicle or one that has been impounded by government authorities shall require to file a license suspense or nullification petition at the local Motor Vehicle Center with a police stolen vehicle report or other related documents issued by the government authorities. In this case vehicle license tax for that year may be calculated based on the actual dates of operation. And one that has had the yearly tax due paid in full are entitled a tax refund on the remainder tax collected. However, a registration reinstatement shall be promptly filed with the Motor Vehicle Center once a stolen vehicle has been recovered, and to have the vehicle tax account reactivated.
2. Motor vehicles hampered by typhoon or earthquake may be switched to a daily count tax levy
   A temporary suspension of tax levy may be filed in the event that a motor vehicle has been hampered by typhoon or earthquake and requires proper overhaul before it can be operated again. A permanent suspension of the tax levy may be filed if a vehicle has been destroyed to a point beyond repair by presenting proof of documents issued by a district magistrate, along with proper identification, vehicle registration, vehicle license plates to the local Motor Vehicle Center, so that the vehicle license plate can be nullified permanently. In which, any tax overpayment may be refunded by filing a refund request with local Motor Vehicle Center where the vehicle registration is kept - as per interpretation made by the Ministry of Finance, reference MOF No. 850530491, announced on Sept. 2, 1996.
3. Vehicles that have had the license delisted, suspended or canceled should apply for a modification registration.
   To retire vehicles that can no longer be operated or will no longer be operated, or simply have had the vehicle registration canceled or withdrawn, a proper modification registration shall be filed with the Motor Vehicle Center seeking a modification registration either for nullification, suspension or permanent delisting. In which, the vehicle license tax may be converted to a daily count, and that any overpayment may have a tax refund covering the unused period be refunded by local Motor Vehicle Center.
4. Disposal of delisted, unwanted, or useless vehicles
   Unserviceable vehicles may disposed and removed by authorized junk car removal services authorized by the Executive Yuan's Environmental Protection Administration, pending a nullification proceedings to be filed with local Motor Vehicle Center by presenting a proper ID, vehicle registration, license plates and other required documentation, seeking the vehicle operating license tax be suspended from the date of recall/disposal of the vehicle.
5. The license tax on rental cars by the car leasing industry is subject to tax rates set for commercial passenger cars
   Classified under the commercial vehicle category, the passenger sedan rental industry, although displaying a private-owned vehicle license plate, is still considered part of the commercial vehicle business; therefore, all passenger sedans operated by the car rental industry are subject to the vehicle license tax based on the passenger sedan tax levy streamlined as of January 1, 1997 (as per interpretation by the Ministry of Finance, reference MOF No. 851918302, announced on Sept. 25, 1996)