HubNet Logistics

Glossary

Duty and VAT

import duty · customs tax · duty and VAT · duty · VAT

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Duty and VAT

Above the list-clearance threshold — USD 200 from the United States, USD 150 elsewhere — duty and value-added tax apply. The taxable amount is the price of the goods plus freight and insurance.

VAT is 10%. Duty rates vary by product: 13% on clothing, 13% on footwear, 8% on bags, and so on. Two things catch people out. First, the threshold is measured on the price plus freight and insurance, not the price alone. Goods at USD 140 with USD 20 shipping come to USD 160 and exceed the limit. Second, several consignments arriving on the same day for the same person may be added together, even if they were bought separately. Once the threshold is passed, tax applies to the whole amount, not just the excess. A USD 151 purchase is taxed on all 151 dollars, not on one. Which goods fall outside the threshold, and how it is measured, is set out under list clearance. The rate used to convert a foreign-currency price into won is the customs exchange rate — not the rate on the day you bought, nor the one your card company settled at.

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