Samil PwC Publishes K-Beauty Accounting and Taxation Guidebook

Samil PwC announced on the 25th that it has published the "K-Beauty Industry Status and Accounting & Tax Guide Book," which contains essential information for the sustainable growth of K-Beauty companies.

Provided by Samil PwC

According to the guidebook, the cumulative export value of domestic cosmetics in the third quarter of this year reached $7.4 billion, a 19.3% increase compared to the same period last year ($6.8 billion). The total cosmetics export value for this year is expected to surpass the record high of $9.18 billion set in 2021. Although exports to China, which accounts for the largest share, declined due to a preference for domestic brands and strengthened regulations, other consumer countries such as the United States, Japan, and the European Union (EU) recorded double-digit growth rates. Indie brand products also rapidly grew in the global market through innovative planning and localized marketing.

The guidebook also covers factors that K-Beauty startups should consider at each stage, from funding to mergers and acquisitions (M&A) and initial public offerings (IPO). Growth strategies for K-Beauty startups include ▲developing specialized products and establishing brand identity ▲expansion strategies considering the global market ▲sustainability and eco-friendly product development ▲digital and D2C (direct-to-consumer) strategies.

Key accounting issues that K-Beauty companies need to consider include revenue recognition, inventory valuation, customer loyalty programs, business combinations, and impairment reviews. It also explains major tax issues such as corporate tax and value-added tax considerations related to promotional events, returns, test products, and mileage. Internal control-related issues are also addressed, including strategies to strengthen internal controls to prevent fraud such as embezzlement and procedures to manage the risk of uncollected sales proceeds.

Kim Young-soon, K-Beauty Industry Leader (Partner) at Samil PwC, said, "After the first revival centered on China in the mid-2010s, K-Beauty is now entering the second revival phase through a complete ecosystem." He added, "With active activities expected in startups, investments, M&A, and IPOs, Samil PwC will become a trusted advisor supporting K-Beauty companies based on quality and industry expertise." Detailed information about the report can be found on the Samil PwC website.

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