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Payment and Refund of Customs Duties

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Generally, tariffs are imposed on imported goods to secure tax revenue and foster domestic industries. There is a tariff refund system which exempts some or all tariffs for certain policy purposes and returns the tariffs paid to the exporter or producer of exported goods when importing raw materials for export.

Payment of Customs Duties

As tariffs on imported goods should be reported and paid, taxpayers must declare the tax base and tax rate on imported goods and pay customs duties within fifteen days from the filing of the import declaration. On the other hand, as an exception to the declaration and payment system, the customs office may establish and announce the amount of tax paid on a traveler’s goods hand-carried into the country. Customs duties can be paid by visiting a bank or financial institution (national treasury) or via internet banking. It is also possible to pay customs duties by credit card through the customs agency’s website.

Reduction or Exemption of Customs Duties

There are two types of customs duty reductions: unconditional reduction of and/or exemption from taxes based on specific facts at the time of import, and conditional customs duty reduction or exemption in which a customs duty is reduced or exempted based on conditions of specific usage. In principle, customs duties may be reduced or exempted as prescribed by the Customs Act. Duties may also be reduced or exempted in accordance with the Foreign Investment Promotion Act, the Restriction of Special Taxation Act, the Submarine Mineral Resources Development Act, as well as multilateral and bilateral agreements.

Refund of Customs Duties

Customs duty refund is a system for returning customs duties collected when exporters or producers import raw materials to be later exported as processed products. In such cases, processing of the raw materials and export of the processed products must be done within two years after the import of the raw materials. An application for a customs duty refund must be filed within two years after the export.