Korea: Customs value of goods imported from bonded area (Supreme Court decision)
Supreme Court recognized the value of the goods imported from the bonded area as the transaction value
Supreme Court recognized the value of the goods imported from the bonded area as the trans
The Supreme Court held (2020du51242) that the value at the time of importation from a bonded area was the customs value in the bonded area transaction under Article 30 of the Customs Act, which is contrary to the existing position of the Korea Customs Service and prior holdings of the Korea Tax Appeals Tribunal.
The Supreme Court recognized the value of the goods imported from the bonded area as the transaction value for the following reasons:
- It is reasonable to conclude that “imported goods” as defined in Article 17(3) of the Enforcement Decree of the Customs Act means goods that have been brought from a bonded area and does not include goods that have merely been brought into a bonded area. Article 2(1) of the Customs Act defines “importation” to mean “the importation of foreign goods into Korea (transit through a bonded zone means importation from a bonded area) or consumption or use in Korea,” where “importation” means that the goods are actually released from the restrictions imposed by the Customs Act and become domestic goods or enter into freely distributable status.
- The meaning of “transaction involving the actual international movement of goods” must not be determined strictly based on the border line, regardless of whether the goods are subject to customs duties, have been cleared for importation, or have been transferred internationally throughout the transaction, and regardless of the circumstances leading up to the transaction or the overall sequence of the transaction.
Read an August 2023 report [PDF 398 KB] prepared by the KPMG member firm in Korea
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