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Payment and Refund of Customs Duties

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In general, tariffs are imposed on imported goods in principle. However, the customs duties shall be exempted in whole or in part in order to carry out specific policy purposes and the customs duties paid at the time of importation shall be returned if the requirements set forth in the Act On Special Cases Concerning The Refund Of Customs Duties are met.

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, etc. collected or to be collected when importing raw materials for export to exporters or producers of the exported goods. A person who intends to receive a refund of customs duties, etc. must file an application for refund within 5 years from the date the goods are provided for export, etc., and a refund of customs duties, etc. on raw materials for export imported within 2 years retrospectively from the end of the day on which the goods are provided for export, etc. (the period of performance for export). The method of refund is divided into individual refund that proves the amount of tax payable and simplified fixed refund that does not prove the amount of tax payable.