SEJONG, Nov. 30 (Korea Bizwire) – South Korea will offer on-spot tax refunds to foreign tourists who buy products at local duty-free shops starting Jan. 1, the government said Sunday.
The Finance Ministry said it is moving to revise existing exemption guidelines governing foreign tourists so they need not pay value-added and excise taxes when they shop in the country.
Under the proposed changes, an item costing less than 200,000 won (US$173) will be eligible for immediate tax refunds at duty-free stores across the country. This means a person can buy a product more cheaply and need not worry about holding onto receipts and showing the purchased products to customs officials when they leave the country to get a refund. The ministry said each foreign national can buy upwards of 1 million won worth of products under this immediate special arrangement.
The move is expected to enhance the shopping convenience of tourists and generate earnings for local stores.
“Purchase data in the first half showed that 79 percent of all tax refunds were for products costing less than 200,000 won,” the ministry said. “People wanting to get the refund must show their passport when buying products and the store must send the information in real time to the customs office.
The ministry said that starting in the new year onward, each customs office chief at local airports and seaport terminals can opt to sample check duty-free products purchased by a foreign national instead of verifying each and every product costing more than 50,000 won. The current rules have been cited for creating long lines at departure areas.
“Focus on inspections will center on expensive goods and frequent visitors to the country,” it said.
The ministry said a pre announcement of the legislation for the rule changes will be made this week, with the plan to be approved by the Cabinet on Dec. 22.’