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Price Report on Imported Goods

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Guideline of Price Report on Imported Goods

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:

  • When it is not difficult to determine the customs value, as follows:
  1. 1 Goods imported by the government or local governments
  2. 2 Government-procured goods
  3. 3 Goods imported by public institutions as defined in Article 4 of the Act on the Management of Public Institutions
  4. 4 Goods exempt from customs duties or internal taxes, etc.
  5. 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. 6 Raw materials for export
  7. 7 Goods imported by special research institutes under the Support of Special Research Institutes Act
  8. 8 Goods with a customs value of USD 10,000 or less; however, goods subject to individual consumption tax, liquor tax, and transportation/energy/environment tax, as well as goods imported in split shipments, are excluded
  9. 9 Goods subject to specific duties; however, goods for which the higher of specific duty or ad valorem duty (or the higher rate) must be applied are excluded
  10. 10 Article 37-1-3 of the Notification on Determining the Customs Value of Imported Goods (Except for Goods subject to provisional value declaration)

Cases Subject to the Mandatory Value Declaration

  • Where other factors (commissions & brokerage fees, packing costs, assists, royalties, or subsequent proceeds) should be added to the price actually paid or payable
  • Cases where amounts to be included in the transaction value of the imported goods exist (e.g., set-off amounts, indirect payments, etc.)
  • Where the customs value is determined by valuation methods #2 through #6
  • Goods subject to direct assessment and collection of customs duties by the customs authority
  • Goods subject to provisional value declaration
  • Goods subject to preliminary tax examination (e.g., goods declared by tax delinquents, goods declared by non-compliant importers, agricultural or fishery products with high price volatility, etc.)

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 (commissions & brokerage fees, containers & packing costs, assists, royalties, subsequent proceeds, freight, etc.) 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
  • If, among the transactions between a buyer 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 buyer 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(Value determined under Article 30) 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 a customs within no longer than 2 years.

Taxpayers are required to submit data for determining the value of such goods.

Taxpayers are required to declare the value of goods to the head of a customs office when filing an import declaration, and submit data for determining the value of such goods (hereinafter referred to as “valuation data”)


Exemption from Valuation Data Submission

  • AEOs (importers), ACVA-approved goods
  • Taxpayers with an annual tax payment under KRW 500 million

Method for Submitting valuation data

  • Regulations on 8 key areas* that may affect the determination of import prices
    * ①Royalties, ②Assists, ③Commissions & Brokerage Fees, ④Freight, Insurance Premiums, and Other Costs of Transport, ⑤Containers & Packing Costs, ⑥Subsequent Proceeds, ⑦Indirect Payments, ⑧Related Party Transactions
  • Valuation data for goods imported from the same seller under the same conditions will be submitted for the initial import only once a year
    ※ The import declaration number from the initial submission must be recorded in the price declaration form
  • Post-Submission of Valuation Data Allowed(30 days)
    ※ ‘Explanatory Statement for Delayed Submission’ is required
  • If none of the import transactions falls into the 8 categories, an “Explanatory Statement for Non-Submission” must be filed instead of valuation data

Management of Companies Failing to Submit Valuation Data (After customs clearance)

  • Cancellation of approval for monthly payment
  • Suspension of exemption from security-offering
  • Tax audits or customs investigations
  • Other actions as stipulated by the Customs Act