Korea Certified Customs Attorney SJ

  For the same royalty payment, if the tax authority views it as ‘irrelevant to imported goods’ while the customs authority sees it as ‘related to imported goods’, importers may feel embarrassed. However, importers should keep it in mind that customs duties and internal taxes are levied under separate laws with different tax purposes, taxable objects, tax bases, and tax calculation methods. Viewing the imposition of internal taxes according to internal tax laws as affecting the imposition of customs duties or as double taxation is not accurate.   Below is the summary of a tax tribunal appeal case (Case No. 조심 2022 관 0142 ). Exporter A sold Product A, which carried a trademark, to a Korean importer, Company A. Company A paid only the price of Product A to Exporter A. Subsequently, Exporter A and Company A jointly invested and established Company B in Korea. Exporter A then sold the same Product A to Company B, requiring Company B to pay both the Product A price and a royal...

  On October 12, 2023, Seoul Customs issued guidance advising importers to pay overseas sellers directly for imported goods instead of utilizing agencies such as customs clearance or transportation agencies. This is because, in accordance with Article 16 of the FOREIGN EXCHANGE TRANSACTIONS ACT ( 외국환거래법 ), if a resident pays money to a person who is not a party to the transaction in question, the payment must be reported in advance. In a standard buy & sell transaction, only the buyer and seller are recognized as parties to the transaction. Therefore, if you are contemplating paying a customs clearance agency for convenience, you should reconsider.   However, if the value of the imported goods doesn’t exceed USD 5,000, you can utilize the customs clearance agency to pay for the goods without reporting a third-party payment. This is because, in accordance with Article 5-10 (1) 1 of the   FOREIGN EXCHANGE TRANSACTIONS REGULATION ( 외국환거래규정 ), an amount of USD 5,000 o...