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S Korea To Provide Immediate Tourist Tax Refunds

by Mary Swire, Tax-News.com, Hong Kong

01 December 2015


The South Korean Ministry of Strategy and Finance is proposing that, from January 1, 2016, foreign tourists will be able to obtain immediate value added tax and individual consumption tax refunds at local duty-free shops in South Korea.

At present, foreign visitors to South Korea cannot purchase tax-free goods at local shops and have to, on departure, present the products bought and relevant receipts to Customs in order to claim a refund. This has resulted in long queues at tax refund desks in airports.

The Ministry will now issue a draft decree that would make an item purchased by individual tourists at local duty-free shops eligible for an immediate tax refund if its purchase price is less than KRW200,000 (USD172). Each individual would be allowed purchases up to a total cost of KRW1m under this arrangement.

The limit has been proposed, the Ministry added, as 39 percent of foreign visitors to the country made a purchase of less than KRW200,000, and 79 percent of tax refunds were related to purchases below that amount, during the first half of 2015.

A tourist would need to show his or her passport to the local shop, which would then submit the passport information and purchase details to Customs in real time.

TAGS: tax | value added tax (VAT) | sales tax | law | travel and tourism | legislation | Korea, South | tax breaks | legislation amendments

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