South Korea Import Tax and Duty-Free Allowance Guidelines

The de minimis value in South Korea refers to the minimum value of imported goods below which no duty or tax is applied. As of the latest updates, this value is set at KRW 150,000. This means that if the total value of the imported goods is below this threshold, the shipment is considered duty-free and VAT (at a rate of 10%) is also not applied, making it a highly beneficial option for low-value imports.

When the value of the imported goods exceeds the de minimis threshold of KRW 150,000, duty and tax become applicable. The duty rate varies by product, and in addition to the duty, a VAT of 10% is also levied on the total value of the goods, including the duty paid. This makes it essential for importers to understand the total landed cost of their goods to avoid any unexpected expenses.

There are certain notable exceptions where the de minimis rule does not apply, even if the value of the goods is below KRW 150,000. These exceptions often include restricted or prohibited items, such as certain types of food products, cosmetics, and pharmaceuticals, which are subject to stricter regulations and may require additional licensing or permits, regardless of their value.

The de minimis threshold has a significant impact on small e-commerce shipments entering South Korea. For e-commerce businesses, understanding the de minimis value is crucial as it can significantly affect the cost structure and pricing strategy for products shipped to South Korean consumers. Shipments valued below KRW 150,000 can be cleared more quickly and at a lower cost, as they are exempt from duty and 10% VAT, making them more competitive in the market.