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Tax payment report and making payment

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Tax payment report and making payment

Duty Payment Declaration

  • In principle, customs duties and internal taxes imposed on import goods should be paid on each transaction basis or in a lump sum within a fixed period of time. Except for goods subject the Notice of duty imposition by customs, most of the imported goods are subject to duty declaration& payment.
  • Only the consignor of imported goods, or a person liable for tax payment, may make duty payment declarations in principle.

The Followings should be Declared

  1. 1 The HS code and duty rate of the goods according to the tariff schedule, and the customs value for each HS code, and the sum of all of the customs values to be paid
  2. 2 In case of getting duty exemption under the Customs Act or a Treaty, the amounts of duty exemption and the legal grounds for exemption
  3. 3 Whether there is a special relationship between the two parties, and its details
  4. 4 Other matters to be considered in determining the customs value

Duty Payment Declarations are Subject to Post-Clearance Audit

For duties declared and paid, the audit is conducted within five years after the import declaration is accepted in principle. However, the audit may be carried out before the acceptance of the import declaration for the following goods:

  1. 1 Goods for exemption of customs duties or internal taxes
  2. 2 Goods for installment payment of customs duties
  3. 3 Goods declared by a delinquent(Except for cases where the amounts of delinquent customs duties are less than KRW 100,000, or an import declaration is made within 7 days of delinquency)
  4. 4 Goods declared by a negligent declarant who falls under the criteria prescribed by the Commissioner of the Korea Customs Service
  5. 5 Goods with highly changeable price ranges and other goods deemed by the Korea Customs Service Commissioner to be inappropriate for the customs duty post-audit. In this case, determining whether an exemption or installment payment of duties is appropriate is conducted before the declaration acceptance. In contrast, an examination of the customs duty and duty rates are done after the acceptance.

The Head of a Customs Office Issues a Notice of Imposition-Payment in the Following Cases:

  1. 1 Where customs duties are collected because the case falls under subparagraphs 1 through 6, or 8 through 11, of Article 16 (Timing of Determining Dutiable Subject) of the Customs Act
  2. 2 Where a facility built in a bonded construction site has been operating before the acceptance of the import declaration
  3. 3 Where goods carried into a bonded area (including a place which is not a bonded area but has got permission for storage) have been released before the acceptance of the import declaration
  4. 4 Where the duty payer requests a notice of imposition-payment for reasons prescribed by the Commissioner of the Korea Customs Service
  5. 5 Where customs duties are collected because an import declaration for goods of immediate release has not been made within 10 days from the date of the immediate release declaration and
  6. 6 Other cases of inappropriate duty payment declarations as prescribed in the Circular of the Ministry of Strategy and Finance.

Duty Payment System and Due Date

  • Where customs duties have not been paid until the acceptance of the duty payment declaration, a notice bill of duty payment will be issued with the payment period of 15 days from the date of the acceptance of the duty payment declaration.
    • Those who have paid duties after the acceptance of the duty payment declaration need not provide security in principle but the duty payers who fall under Article 248-2 of the Customs Act are required to provide security.
  • The monthly payment system is designed to promote the convenience of duty payers faithfully meeting payment obligations: if the duty payers have made multiple duty payment declarations, and all of their due dates are in the same month, the duty payers are allowed to make a lump-sum payment of all of the duty liabilities by the last day of the month.
    • Using this system has an effect equivalent to extending the payment period by up to 45 days.

lump-Sum Payment for Raw Materials for Export

  • Reflecting the fact that customs duties for raw materials to be exported are refunded after their import, the lump-sum payment system under the Act on Special Cases concerning the Drawback of Customs Duties, etc. Levied on Raw Materials for Export allows collection of such duties to be suspended for 1 month to 6 months, ensuring that duties to be paid and refunded offset each other.
    • Among taxes imposed on imported goods, the VAT is excluded from the lump-sum payment system.

The Due Dates of Various Payment Systems are as Follows:

The Due Dates of Various Payment Systems are as Follows:
Payment System Main Purpose Due Date Legal Grounds
Principle Payment in general - Declaration and payment system : within 15 days from the date of the acceptance of the duty payment declaration Article 9-1 of the Customs Act
Notice of imposition-payment system : within 15 days from the date of a duty payment notice
Immediate release system : within 15 days from the date of the import declaration
Exceptions Duty payment correction system revision application To pay the deficient value The day after the date of the revision application Subparagraph 4 of Article 38-2 of the Customs Act
amended declaration To pay the deficient value The day after the date of the amended declaration Subparagraph 1 of Article 38-3 of the Customs Act
Monthly payment system For the convenience of duty payers and saving financial costs The last day of the month into which the due dates of duty payments fall Subparagraph 3 of Article 9 of the Customs Act
Collection deferment system To mitigate difficulties from disasters, etc. The date set by the head of the customs within one year Article 10 of the Customs Act, and Articles 15 through 17 of the National Tax Collection Act
Installment payment system natural disasters  Subparagraph 1 of Article 107 of the Customs Act
particular goods, etc To build industrial facilities, support SMEs, etc. The date set by the head of the customs within 5 years from the date of approval for installment payment Subparagraph 2 of Article 107 of the Customs Act
Lump-sum payment system To defer the due date 15th of the month following the month into which the last day of the lump-sum payment period falls (within 6 months) Article 5 of the Special Cases concerning the Drawback of Customs Duties, etc. Levied on Raw Materials for Export
Collection before due date system To secure tax receivables The date fixed by the head of the customs Article 14 of the National Tax Collection Act