Section 1: What is Domestic Consumption Tax?
Foreign goods taken over from bonded areas, so-called “imported goods”, are in principle subject to domestic consumption tax, and the individual who takes over the imported goods is obliged to pay domestic consumption tax. If you are an importer, it is necessary for you to file a domestic consumption tax return and pay it.
Domestic consumption tax refers to consumption tax, liquor tax, tobacco tax, gasoline tax, local gasoline tax, oil and gas tax, or petroleum and coal tax (See Article 2, Item 1 of the Act on Collection, etc. of Domestic Consumption Tax on Imported Goods).
Section 2: When does Domestic Consumption Tax not apply?
For the time being, no domestic consumption tax is imposed on goods to which the simplified tax rate for imported goods by entrants is applied (Article 2-2 of the same law). In addition, when customs duties are exempt, it is not uncommon for import consumption tax to also be exempt (Article 13 of the same law); however, it should be noted that there are cases where import consumption tax is not exempt.
It should be noted that even in cases where the tariff rate is zero and therefore no duty is payable, there are cases where import consumption tax must be paid.
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