[Changes in the Second Half of 2022] Import Coffee Beans and Packaged Kimchi VAT Exemption

Increase of 10%P in the Limit for Agricultural Product Input Tax Credit

[Image source=Yonhap News]

[Asia Economy Sejong=Reporter Kwon Haeyoung] Starting from July, processed food products such as kimchi, soy sauce, and danmuji individually packaged in bottles or cans can be purchased without value-added tax (VAT). VAT on coffee and cocoa beans, popular food items among the public, will also be exempted.

The government published "Changes Starting from the Second Half of 2022," summarizing the institutional and legal changes effective from the second half of this year, on the 30th.

To stabilize living and food prices, the government is promoting the reduction of ingredient costs and import prices. Accordingly, processed food products sold in individually packaged plastic or aluminum pouches will be exempt from VAT on supplies from July 1. This includes blanched vegetables, kimchi, danmuji, pickled vegetables, salted seafood, marinated crab, tofu, meju, soy sauce, doenjang, and gochujang. The VAT exemption period is until 2023.

Coffee and cocoa beans, excluding roasted ones, can also be imported without VAT until 2023.

Additionally, starting next month, the government will raise the limit for tax credit on deemed purchases of duty-free agricultural products by 10 percentage points compared to the previous limit. This is to reduce the material cost burden on the food manufacturing and dining industries. Accordingly, individual business owners operating restaurants with annual sales under 200 million KRW currently recognize purchase amounts up to 65% of sales for input tax calculation, but this will increase to 75% going forward.

This content was produced with the assistance of AI translation services.