Includes information on average tariff rates and types that U.S. firms should be aware of when exporting to the market.
The original U.S.-Korea FTA was implemented on March 15, 2012. Prior to that, the average basic tariff on U.S. goods was approximately 7.9 percent and duty rates were high on many high-value agricultural and fisheries products.
As of January 1, 2020, 98.8% of U.S. products enter Korea duty-free. The U.S. Department of Commerce’s FTA Tariff Tool (https://www.trade.gov/what-fta-tariff-tool) can help U.S. exporters identify the harmonized system number for their products and the associated tariff rates over the next ten years. Exporters can also contact the U.S. Agricultural Trade Office (http://www.atoseoul.com/), affiliated with the U.S. Embassy in Seoul, for specific information on agricultural tariff rates.
Korea also maintains a tariff quota system designed to stabilize domestic commodity markets. Customs duties can be adjusted every six months, within the limit of the basic rate, plus or minus 40 percent.
Korea has a flat 10 percent Value Added Tax (VAT) on all imports and domestically-manufactured goods. A special excise tax of 10-20 percent is also levied on the importation of certain luxury items and durable consumer goods. Tariffs and taxes must be paid in Korean Won within 15 days after goods have cleared Customs.
Duties are assessed on a Cost-Insurance-Freight (CIF) basis. The main mode of customs evaluation is the transaction value method. Other methods under the WTO appraisement hierarchy may be used if there are doubts about Korean Customs valuation methods on the stated value.
A Value Added Tax rate of 10 percent is applied on imports based on customs value plus duties.