South Korea Import Duty: Tariff Rates, Customs Duty & Duty Calculation

Import duty in South Korea is a tax imposed on goods imported into the country. The duty rates vary by product and are determined based on the Harmonized System (HS) code of the imported goods. In addition to import duty, a 10% Value-Added Tax (VAT) is also applicable on the import value of the goods. The import duty and VAT are calculated on the basis of the Customs value of the goods, which includes the cost of the goods, insurance, and freight.

The import duty in South Korea can be calculated in two ways: ad valorem and specific. Ad valorem duty is calculated as a percentage of the customs value of the goods, while specific duty is calculated as a fixed amount per unit of the goods. The duty rates vary by product and are determined based on the HS code of the imported goods. For example, the duty rate for certain machinery may be 5% ad valorem, while the duty rate for certain textiles may be 10% ad valorem or KRW 10,000 per unit.

HS codes play a crucial role in determining the import duty rates in South Korea. The HS code is an international standard for classifying goods and is used to determine the duty rate applicable to a particular product. The Korean Customs Service uses the HS code to classify goods and determine the applicable duty rate. It is essential to ensure that the correct HS code is used to avoid incorrect duty payments or delays in customs clearance.

The country of origin of the goods can have a significant impact on the import duty rates in South Korea. Goods originating from countries with which South Korea has a free trade agreement (FTA) may be eligible for reduced or zero duty rates. The rules of origin under the FTA determine whether the goods qualify for preferential treatment. It is essential to ensure that the goods meet the rules of origin to take advantage of the preferential duty rates.

To calculate the import duty and VAT in South Korea, the following steps can be followed: Determine the customs value of the goods, including the cost of the goods, insurance, and freight. Determine the applicable duty rate based on the HS code of the goods. Calculate the import duty by multiplying the customs value by the duty rate. Calculate the VAT by multiplying the customs value plus the import duty by the VAT rate of 10%. For example, if the customs value of the goods is KRW 100,000 and the duty rate is 5% ad valorem, the import duty would be KRW 5,000 and the VAT would be KRW 10,500 (10% of KRW 105,000).