South Korea: Incheon Headquarters Customs detected unfair VAT exemption on boiled imported ferns

Published 2024년 4월 29일

Tridge summary

South Korea's Incheon Headquarters Customs has caught importers evading value-added tax (VAT) by misdeclaring 'boiled ferns' as 'boiled vegetables in retail packaging', taking advantage of a temporary VAT exemption for the latter. The customs authorities have determined that the misdeclared product was not a blanched fern, as it underwent a heat treatment and preservation process that altered its original structure, and hence, should not have been exempted from VAT. Consequent to this fraudulent activity, Incheon Customs has imposed a VAT liability of KRW 1.3 billion on 8,942 tons of the wrongfully exempted volume and demanded tax reporting for 1,057 tons of upcoming imports. The customs agency will enhance its scrutiny of potentially tax-evasive items to prevent such incidents in the future.
Disclaimer:The above summary was generated by Tridge's proprietary AI model for informational purposes.

Original content

Incheon Headquarters Customs announced on the 25th that it had caught importers who were unfairly exempted from value-added tax by importing ‘boiled ferns’ from China in retail packaging and declaring them as ‘boiled ferns.’ In order to stabilize living prices for the common people, the government has revised the enforcement rules of the ‘Value-Added Tax Act’ and is temporarily exempting value-added tax on ‘boiled vegetables in retail packaging’ from July 1, 2022 to December 31 of next year. Before the revision of the enforcement rules of the ‘Value-Added Tax Act’, even boiled vegetables were subject to value-added tax if they were retail packaged. Therefore, all retail-packaged ferns, whether blanched or boiled, were subject to value-added tax. However, after the revision, even if it was retail packaged, blanched bracken was exempt from value-added tax, so some importers reported retail-packaged ‘boiled fern’ as ‘boiled fern’ and were unfairly exempted from value-added tax. It ...
Source: Nongmin

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