Korea: Customs penalty upheld even though taxpayer voluntarily amended customs value (Tax Tribunal decision)

Taxpayer voluntarily amended its customs value on its import declaration

Taxpayer voluntarily amended customs value (Tax Tribunal decision)

The Tax Tribunal upheld (2022-Customs-0031, 2 February 2023) a penalty imposed by the customs authority even though the taxpayer voluntarily amended its customs value on its import declaration to reflect an annual transfer-pricing based post-compensating adjustment paid to its affiliates.


The taxpayer argued that it could not be regarded as negligent because it made considerable efforts to fulfill its tax obligations by filing amendments regarding the post-compensating adjustment. The Tribunal found, however, that the fact that the taxpayer was unable to report an exact customs value with a determined adjustment amount at the time of import declaration was only due to the internal circumstances around the taxpayer’s transfer pricing policy.

In addition, the fact that the taxpayer did not have an advanced customs valuation arrangement (ACVA) was also due to internal circumstances in which the taxpayer could not receive detailed data from its headquarters.

Read an April 2023 report [PDF 310 KB] prepared by the KPMG member firm in Korea



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