IT-Silkroad

[Individual Consumption Tax]

■ Outline

Individual consumption tax in S. Korea refers to a consumption tax selectively levied on specific goods and services, which is formerly called special consumption tax. It's an indirect tax which is designed to suppress the waste of high-income level and the trend of luxury living, and to make people live a balanced and sound consumer life.

Any person who intends to import items subject to individual consumption tax, he/she shall pay individual consumption tax along with customs duty to the competent Customs.

■ Taxable Object

ㅇ General products

- Electric and recreational meandering equipment and other amusement goods

- Hunting guns (except air guns)

ㅇ Standard price setting article

- Jewelery, pearls, turtles, coral, pumpkin, ivory and products using them

- Precious metal products

- Luxury Watch

- Advanced fur and its products

- Luxury bags

- Luxury carpets

- Luxury furniture

ㅇ Automobile

- Passenger cars, camper cars with displacement exceeding 2000cc

- passenger cars with a displacement of 2000cc or less,

- Electric car

ㅇ Oil

- Gasoline, light oil, kerosene, heavy oil, propane, butane, natural gas, byproduct oil, bituminous coal

ㅇ Tobacco

■ Assessment Standard and Tax Amount

Individual consumption tax is the amount of multiplying assessment standard of import goods by relevant individual consumption tax rate.

☉ Assessment standard

ㅇ General goods : dutiable value of customs duty + customs duty

ㅇ Goods whose base price is set : (dutiable value of customs duty + customs duty ) – base price

ㅇ Goods whose customs duty is levied by quantity : quantity (kg, ℓ, etc.)

■ Exemption Targets From Individual Consumption Tax

In S. Korea, individual consumption tax may be exempt according to the importer, usage, etc. speculated by the Individual Consumption Tax Act.

☉ Exemption Targets

ㅇ Goods to which simplified tax rate is applied in accordance with the Customs Act;

ㅇ Goods collected in manufactory in accordance with the Livestock Products Sanitary Control Act, the Pharmaceutical Affairs Act or the Food Sanitation Act;

ㅇ Carrying-out of the goods which are to be exported to other place;

ㅇ Import goods on the condition of being exhibited in international fair, or import goods for free for the exhibition of domestic fair, etc. which are duty-exempt;

ㅇ Goods which are carried in duty-exempt, but returned to manufactory for the reasons of poor quality or other particulars;

ㅇ Goods to be exported;

ㅇ Goods to be supplied to foreign military forces stationed in S. Korea;

ㅇ Diplomatic goods;

ㅇ Goods exclusively supplied for dealership for foreigners;

ㅇ Goods applicable to the conditions regulated by this Act such as goods for raw materials, research, academic studies, donation, and moving purposes;

ㅇ Other items speculated by this Act.

■ References

ㅇ Individual consumption tax is applied to taxable objects and at a tax rate speculated by the Individual Consumption Tax Act. Please check whether relevant goods may be tax-exempt according to the importer, usage, etc.

ㅇ Among goods on whose individual consumption tax is levied, there are goods on whose education tax and rural development tax are levied at the same time.