[2024 Tax Reform] Overseas Direct Purchase Customs Clearance Speeds Up... New System for Vendor Registration Established

Korea Customs Service to Streamline Customs Clearance for Registered Companies
Also Promotes Mandatory Electronic Donation Receipts

The government is simplifying customs clearance procedures in response to the recent increase in overseas direct purchases. A new registration system for e-commerce companies will be established, reducing inspection procedures for registered companies that provide related information to the Statistics Korea before importing goods. To expand the year-end tax adjustment simplification service, the government is also promoting a plan to mandate the issuance of donation receipts electronically.

The government announced the '2024 Tax Law Amendment' containing these measures on the 25th.

The number of e-commerce goods imports increased annually from 88.38 million cases in 2021 to 96.12 million in 2022, and 131.44 million last year. The growth rate is also steep. While the number of imports increased by 8.76% in 2022 compared to the previous year, the growth rate reached 36.75% last year.

With the surge in overseas direct purchase goods, the government sees the need to improve systems such as customs clearance and hazardous goods management efficiency, and thus is revising and establishing related laws. The approach is to secure transaction information before importing overseas direct purchase goods to streamline customs clearance.

Domestic and foreign e-commerce companies wishing to apply simplified customs clearance procedures must register with the Korea Customs Service, and registered companies requested by the Commissioner of Customs must provide sales transaction information before importing goods. This transaction information includes order number, purchase date, product name, product price, platform, and more.

The Korea Customs Service uses the provided transaction information to apply simplified import/export declarations and selective inspections. Instead of the previous method of X-ray inspection for all e-commerce goods (consignment goods), selective inspections focus on high-risk items.

The government views this amendment as necessary to reduce organizational and personnel waste at the Korea Customs Service. Considering the Korea Customs Service’s preparation for system implementation and the guidance period for domestic and foreign e-commerce companies, the enforcement of this amendment is expected in 2026.

Electronic Donation Receipt Issuance... Benefits for Year-End Tax Adjustment Simplification

The government will also promote the issuance of electronic donation receipts through this amendment. Public interest corporations with donation receipt issuance amounts above a certain scale will be required to issue electronic receipts instead of paper ones. In this case, donation details will be automatically uploaded to the National Tax Service.

Year-end Tax Settlement Simplification Service Guide Photo [Image Source=Yonhap News]

Previously, smaller organizations or institutions often did not issue donation receipts electronically, so their details were not reflected in the year-end tax adjustment simplification service. With the activation of electronic receipt issuance, taxpayers can reduce the effort of managing these receipts themselves.

The government plans to establish specific eligibility criteria considering last year’s donation receipt issuance scale and the status of electronic donation receipt issuance. The application period is expected to start from donations received after January 1 of next year.

The Ministry of Economy and Finance explained, "(Upon legal amendment) since it may burden various organizations, in the early stages of enforcement, no additional tax will be imposed, and a declarative mandatory regulation will be established."

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