Value Declaration

  • When making an import declaration, taxpayers are required to declare the value of the goods to the head of the customs.
  • In the value declaration, importers are required to submit documents on import-related transactions, details on the calculation of dutiable value, and other data related to the determination of the dutiable value.

The filing of Value Declaration may be waived in the Following Cases:

  • If the same goods are imported on the same conditions repeatedly
  • If there is no value to be added to the price paid or to be payable by the buyer for goods sold for export to Korea other than freight and insurance premiums incurred until the goods arrive at the port of entry
  • Where determining the customs value is simple, as follows:
  1. Goods imported by the government or local governments
  2. Government procurements
  3. Goods imported by public institutions
  4. Goods exempt from customs duties or internal taxes, etc.
  5. Goods imported as machinery, parts thereof, or raw materials for the defense industry(Limited to those with import confirmation or import recommendation granted by an institution relating to the goods concerned)
  6. Raw materials for export
  7. Goods imported by special research institutes under the Support of Special Research Institutes Act
  8. Goods with no more than USD 10,000 in customs value among those designated by the Commissioner of the Korea Customs Service and
  9. Other goods where the Commissioner of the Korea Customs Service deems it is not difficult to determine the customs value.
    • Article 46-1 of the Notification on Determining the Customs Value of Imported Goods
    • Goods with no more than USD 10,000 in customs value (Except for goods subject to internal taxes and goods for partial import declaration)
    • Goods subject to specific duties (Except for goods whose duty rate changes according to the price)
    • Goods included in the decision for the advance screening of dutiable price between persons with the special relationship

Cases Subject to the Mandatory Value Declaration

  • Where other factors (commissions, packing container expenses, production assist costs, royalties, and license fees, or post-import benefits) should be added to the price actually paid or payable
  • Goods subject to customs duties levied by customs
  • Goods subject to provisional value declaration
  • Goods for advance tax amount screening (Goods declared by a delinquent taxpayer, goods declared by an unfaithful declarant, agricultural and fishery products with severe price fluctuation)
  • Where the customs value is determined by valuation methods #2 through #6
  • Where there is a value to be added to the price actually paid or payable of the
  • imported goods (eg. set-off and indirect payments) and
  • Where there is a discount pursuant to subparagraphs 1 (restrictions on the disposition or use) or 2 (condition or consideration) of Article 30-3 of the Customs Act

Provisional Value Declaration system

Filing a provisional value declaration is possible when the value has not been determined as follows:

  • Where the goods are primary product, such as crude oil and ore, and the value has not been determined as of the date of import declaration;
  • If the factors for the additional price of imported goods (commission, packing container cost, production support expense, fee for use of right, ex post facto benefit) are decided a certain period after the date of import declaration
  • If a company applies for Advance Customs Valuation Arrangement (ACVA) for the decision of the taxable price of the goods traded between persons with special relationship
  • If, among the transactions between a purchaser and a seller with special relationship, the transaction price of an imported good is expected to be adjusted to a normal price after the acceptance of import declaration according to the policy of transfer price the price adjusted by the transaction price of the imported good set by the seller and the purchaser is judged as actually paid and received and to be distributed and calculated objectively for the imported good concerned and the company is qualified for the following requirement:
    • The taxpayer is approved by ACVA or APA
    • Attach the following documents to the Imported Goods Transaction Price Adjustment Plan and submit them to the head of the customs office at least one month prior to import declaration for the transaction concerned:
      • Material that explains about the calculation method of the price of each imported good in detail
      • Certificate of ACVA or APA approval
      • Combined report on international transaction information
      • Other documents necessary for the confirmation of the requirement for the report of temporary price
  • If the value declaration with a temporary calculated price is deemed inevitable by the head of a customs office, due to the specific traits of the contract or transaction
    • If it takes a long time due to the decision of the taxable price based on the domestic sales price (Method 4)
    • If delivery is completed after a considerable period of time from the initial date of order of the goods, such as industrial plant contracted on a turn-key system
    • If the price of the imported goods are finalized after import, and the case satisfies all of the following requirements:
      • A. The formula for the calculation of the final transaction price should be fixed before import by a contract between the transaction parties concerned.
      • B. The final transaction price should be finalized by the facts occurring after import.
      • C. The facts occurring after import should be based on variables that cannot be controlled by the transaction parties concerned.
    • Other cases wherein reporting the price with a temporary price is deemed inevitable by the head of the customs office

An importer who has made a provisional value declaration should declare the final value based on the details of the transaction contract between the buyer and seller within a period fixed by the head of customs within no longer than 2 years.