Korea Customs Service

Fix the tax amount by the Self-regulating examination of the amount of import duty regime

Self-regulating examination of the amount of import duty regime was introduced to reduce taxation challenges through the partnership between tax authorities and the private sector.

A company may conduct an annual self-inspection of the errors in tax amount for the articles imported during the previous fiscal year, and receive the interim validation of a customs expert, and file the report to the customs office to finalize the tax amount.

Settlement procedures

• Every January, an official announcement is made to receive the self-settlement enrollment among AEO companies, and the eligible companies for the self-settlement are selected considering the multiple factors of the companies such as inspection capacity.
• A self-examination is conducted on the customs value, tariff classification, customs duty exemption, refund, bonded factory, and foreign exchange transaction based on the details declared for export and import during the previous fiscal year, including information on the risk of tax evasion provided by a customs official who is an expert in corporate consulting.
• If the company submit the settlement report for the details of self-examination with the verification of a customs broker, the customs office will then notify the final results after screening the report.
• The company can make a correction or revision report after receiving the notification of settlement results. It is possible to defer it to next year if it is necessary to do additional screening.

Benefits for the companies conducting a self-examination

• Customs duty investigation is waived except for exceptional cases such as the submission of false or illegal materials.
• A revised import tax invoice will be issued for the VAT to be paid additionally as a result of the settlement.
• The submission of a regular self-evaluation report checking the observance of official standards every year is waived.