- Duty is calculated on the CIF customs value — price plus freight and insurance to Korea — under Article 30 of the Customs Act, at the rate for the product’s HS tariff line.
- Basic rates are typically 8% for industrial goods, 0% for most IT products, 13% for clothing and footwear, and far higher for many agricultural products.
- FTA origin can cut duty to zero, but only with valid proof of origin held by the importer.
- 10% import VAT is charged on the customs value plus duty and excise and is recoverable by a VAT-registered importer; excise and liquor tax are not.
- Duty and taxes are self-assessed and paid within 15 days of the declaration’s acceptance; Korea Customs audits afterwards.
Korea is an open, low-tariff economy for most manufactured goods and a high-tariff one for many farm products. A German machine, a Japanese component or a US laptop typically enters at 0–8% duty — often zero under a free trade agreement. Italian cheese, Australian beef or Chinese garlic can face rates that make importers blink. Between the two sits a system of adjustment tariffs, quotas, anti-dumping duties and excise taxes that turns ‘the rate’ into a calculation.
This guide walks through the calculation in the order Korea Customs applies it, with the statutes behind each step, and ends with payment, refunds and the mistakes that lead to post-clearance assessments. For structuring an import business, see importing into Korea through your own company.
The formula
Under the Customs Act, customs duty is levied on imported goods, and the importer of record is the taxpayer. The duty is the customs value (과세가격, gwase gagyeok) multiplied by the applicable rate. Import VAT (수입부가가치세, suip bugagachise) of 10% is then charged under Article 50 of the VAT Act on the customs value plus the duty plus any individual consumption tax (개별소비세, gaebyeol sobise), liquor tax and education tax — all collected by Korea Customs at the same time. Agricultural surtax and other special levies apply to a few products.
Step 1: classification
Every product belongs to a ten-digit line of the Korean tariff, the HSK (관세·통계통합품목분류표, gwanse tonggye tonghap pummok bullyupyo), built on the international Harmonized System. The first six digits are international; the last four are Korean. The line decides the duty rate, which FTA rules of origin apply, and which product approvals Korea Customs checks at the border.
Classification follows the General Interpretative Rules and Korea Customs’ explanatory notes and rulings, not the product’s commercial name. A ‘smart watch’ may be a watch or a communication device; a ‘cosmetic’ with a therapeutic claim may be a pharmaceutical. Where the line is unclear, apply for an advance classification ruling (품목분류 사전심사, pummok bullyu sajeon simsa) under Article 86 of the Customs Act; the ruling binds Korea Customs for the product and usually issues within weeks. Misclassification is the most common cause of post-clearance assessments.
Step 2: the customs value
The customs value is normally the transaction value (거래가격, georae gagyeok) — the price actually paid or payable for the goods when sold for export to Korea — adjusted under Article 30. Korea uses the CIF basis: the following are added to an ex-works or FOB price if not already included:
- freight and insurance to the Korean port or airport;
- commissions and brokerage, other than buying commissions;
- containers and packing costs;
- assists supplied free or at reduced cost by the buyer — tools, moulds, designs, materials;
- royalties and licence fees related to the goods and paid as a condition of their sale;
- any part of the proceeds of resale that accrues to the seller.
Values in foreign currency are converted at the weekly exchange rate published by Korea Customs. When buyer and seller are related, the transaction value is accepted only if the relationship did not influence the price; otherwise Korea Customs moves through the alternative methods in Articles 31 to 35. Groups with significant related-party imports can agree the method in advance under Article 37. See importing through your own company for the transfer pricing interaction.
Step 3: the rate
Korea’s tariff has several layers, applied in an order of priority set by Article 50:
| Type | Korean | What it is |
|---|---|---|
| Basic rate | 기본세율 | The default statutory rate in the tariff schedule |
| Provisional rate | 잠정세율 | Temporary statutory rates for specific lines |
| FTA preferential rate | 협정관세 | Reduced or zero rates for goods of qualifying origin, claimed by the importer |
| WTO and other conventional rates | WTO 양허관세 등 | Bound rates under international agreements |
| Quota rate | 할당관세 | Lower rates for set quantities or periods, to stabilise prices or supply (Art. 71) |
| Adjustment rate | 조정관세 | Higher rates on sensitive goods to protect domestic industry (Art. 69) |
| Anti-dumping, countervailing and safeguard duties | 덤핑방지관세 등 | Additional duties on specific products from specific suppliers or countries (Arts. 51–68) |
Layers of the Korean tariff. Trade-remedy duties are added on top of the applicable rate.
Typical basic rates give a sense of the range:
| Product | Typical basic rate |
|---|---|
| Most industrial goods, machinery, auto parts, cars | 8% |
| Computers, semiconductors, phones (Information Technology Agreement) | 0% |
| Cosmetics | 6.5% |
| Clothing and footwear | 13% |
| Wine | 15% |
| Whisky and other spirits | 20% |
| Cheese | 36% |
| Beef | 40% |
| Rice, garlic, red pepper and other protected crops | Several hundred per cent above quota |
Indicative basic rates. The exact HS line decides the rate; FTA rates are often lower.
Step 4: origin and FTA preference
Korea has FTAs with the US, EU, UK, EFTA, China, ASEAN, India, Australia, Canada, New Zealand, Vietnam, Turkey, Israel and several Latin American partners, and is a member of RCEP with Japan and others. For goods that meet the agreement’s rules of origin (원산지결정기준, wonsanji gyeoljeong gijun), the preferential rate is often zero.
Preference is claimed by the importer under the FTA Customs Act at import, or within one year afterwards by a refund claim, and requires valid proof of origin (원산지증빙서류, wonsanji jeungbing seoryu): an origin statement by an approved exporter for EU and UK goods, certification for US goods, a certificate of origin for Chinese and most ASEAN goods. Korea Customs, or the exporting country’s authority, can verify origin for years afterwards; if it cannot be proved, the preference is withdrawn with penalties. Keep the supplier’s documents for five years.
Origin is where the goods were made under the rules, not where they were shipped from. Goods made in China and shipped through a European warehouse are Chinese for Korean customs. See importing into Korea for the partner-by-partner table.
The cheapest duty is the one you can prove you do not owe. Origin documents are money.
Voixa Korea
Step 5: excise, liquor tax and other levies
Some goods carry Korean excise collected at import, which — unlike VAT — is a real cost unless the goods are exported again:
- Passenger cars: individual consumption tax, at a standard 5% (temporary reductions have applied in some periods), plus education tax of 30% of it, under the Individual Consumption Tax Act.
- Luxury goods: bags, watches, jewellery, furs and similar items bear individual consumption tax of 20% on the part of each item’s value above set thresholds — KRW 2 million for bags and watches — plus education tax.
- Alcohol: liquor tax under the Liquor Tax Act — 30% of the value plus duty for wine, 72% for whisky and most spirits, specific per-litre rates for beer and makgeolli — plus education tax of 10% or 30% of the liquor tax. Importers also need a liquor import licence.
- Tobacco, fuel and some energy products: specific excise and levies.
- Agricultural surtax and rural development tax on certain items.
Import VAT of 10% is then charged on the total. A VAT-registered importer recovers it through its next return; excise, liquor tax and education tax are recovered only on export, through drawback.
Declaring and paying
The importer — usually through a licensed customs broker (관세사, gwanse-sa) — files an import declaration (수입신고, suip singo) through Korea Customs’ UNI-PASS system under Article 241, with the invoice, packing list, bill of lading or air waybill, proof of origin and any approvals. Goods placed in a bonded area must be declared within 30 days of entry, or a late-declaration penalty applies. Declarations can be filed before arrival, on arrival or after warehousing.
Korea uses self-assessment (신고납부, singo nappu) under Article 38: the importer declares the classification, value, origin and tax, and pays within 15 days of the declaration’s acceptance under Article 9. Most goods are released on acceptance, before payment, against the importer’s obligation to pay; high-risk goods are inspected first. Regular importers with security and a clean record can pay monthly in a single consolidated payment (월별납부, wolbyeol nappu). Manufacturers and exporters meeting the conditions can defer import VAT under Article 50-2 of the VAT Act.
Personal and e-commerce imports
Goods bought by individuals for personal use — mostly online — are cleared through a simplified list clearance (목록통관, mongnok tonggwan) procedure. Consignments up to USD 150, or USD 200 from the United States under KORUS, are exempt from duty and import VAT; above that, the full calculation applies on the whole value. Buyers use their personal customs clearance code (개인통관고유부호, gaein tonggwan goyu buho). Splitting orders to stay under the threshold is treated as evasion where goods are bought together. Commercial quantities never qualify. A foreign brand that sells cross-border to Korean consumers uses this route; one that holds stock in Korea imports as a business. See e-commerce in Korea.
Requirements beyond duty
Korea Customs releases goods only when other authorities’ requirements are met, under Article 226: food and cosmetics registrations with the Ministry of Food and Drug Safety, KC safety certification for electrical goods and children’s products, quarantine for plants and animals, licences for alcohol, medical devices and chemicals. Goods also need correct country-of-origin marking (원산지 표시, wonsanji pyosi) under the Foreign Trade Act. Missing approvals mean goods held in a bonded warehouse at the importer’s cost. See cosmetics and food regulation.
Refunds and relief
- Duty drawback: duty on imported materials used in goods that are exported within two years is refunded under the drawback act; small exporters can use a simplified fixed-rate method.
- Goods returned or defective: duty can be refunded on goods re-exported because they did not conform to the contract, under Article 106.
- Temporary imports: samples, exhibition goods and professional equipment can enter under ATA carnet or temporary admission without duty if re-exported.
- Correction and refund claims: an importer that overpaid can file a request for correction within five years; one that underpaid should file an amended declaration before Korea Customs finds it, to reduce penalties.
- Bonded areas: goods stored or processed in bonded warehouses or free trade zones pay nothing until released into Korea, and nothing if re-exported.
Audits and penalties
Because Korea relies on self-assessment, checks happen mostly after release. Korea Customs audits declarations for up to five years, focusing on classification, related-party valuation, royalties and FTA origin. Underpaid duty and taxes are collected with penalty surcharges and interest; deliberate undervaluation or false origin claims are smuggling offences under the Customs Act. Regular importers can apply for AEO (수출입 안전관리 우수업체, suchurip anjeon gwalli usu eopche) status under Article 255-2 for fewer inspections and faster clearance.
Two worked examples
Italian wine. A Seoul importer brings in EUR 20,000 of Italian wine, with EUR 1,000 of freight and insurance. At a rate of KRW 1,550 to the euro the customs value is about KRW 32.6 million. With EU origin proved, duty is zero; liquor tax at 30% is about KRW 9.8 million, education tax at 10% of that about KRW 1 million, and import VAT about KRW 4.3 million. The importer pays about KRW 15 million at the border and recovers the VAT, leaving about KRW 10.8 million of liquor and education tax as a real cost — a third of the value. Without proof of origin, a further 15% duty would apply, and liquor tax and VAT would rise with it.
Chinese electronics accessories. A distributor imports USD 50,000 of phone cases and chargers, CIF. At KRW 1,400 to the dollar the customs value is KRW 70 million. At the basic 8% duty is KRW 5.6 million; with a Korea–China FTA certificate of origin and a 0% preferential rate, it is nothing. Import VAT is about KRW 7.6 million at the basic rate or KRW 7 million with preference, recovered either way. The certificate is worth KRW 5.6 million on this shipment alone.
Mistakes we see
- Classifying by product name rather than the tariff rules, then paying the difference with penalties.
- FOB values declared without adding freight and insurance.
- Royalties left out of the customs value on related-party imports.
- FTA rates claimed without valid proof, or with proof for the wrong product.
- Anti-dumping duties discovered after selling prices were agreed.
- Excise forgotten on cars, luxury goods and alcohol when pricing.
- Goods held at the border for missing MFDS or KC approvals.
- Splitting consumer orders to stay under the de minimis.
Korean terms you will meet
Questions readers ask
How is import duty calculated in South Korea?
On the CIF customs value — price plus freight and insurance to Korea — multiplied by the rate for the product’s HS tariff line and origin. Import VAT of 10% is charged on the value plus duty and excise.
What is the typical import duty rate in Korea?
About 8% for most industrial goods, 0% for most IT products, 13% for clothing and footwear, and much higher for many agricultural products.
Is import VAT recoverable?
Yes, for a VAT-registered importer, through its VAT return. Excise, liquor tax and education tax are not, except on re-export.
How do I get FTA rates?
Hold valid proof of origin for the agreement concerned and claim the preferential rate at import or within one year by a refund claim.
When must import duty be paid?
Within 15 days of the import declaration’s acceptance; regular importers can pay monthly.
Is there a duty-free threshold?
For personal imports, USD 150 per consignment, or USD 200 from the United States. Commercial imports have no de minimis.
Are cars and luxury goods taxed more?
Yes. Cars bear individual consumption tax and education tax; bags, watches and jewellery bear 20% individual consumption tax above per-item thresholds.
Alexander Baranov
Founder of the BCA Group · cross-border corporate and tax adviser since 2008
Alexander advises foreign founders and groups on company formation, tax structuring and corporate law in more than 40 jurisdictions across Europe, the Gulf, Asia and Latin America. He is the author of nine books on international business and tax and writes regularly for professional finance and tax journals. He works in English, German, Spanish and Russian.
This guide is based on the Korean statutes cited in the text and on our own filings. It is reviewed when the law or official rates change.