Incheon Main Customs
(Background) A company is subject to tax reduction regarding its imported goods. Nonetheless, the Customs imposed tariffs of 5.6 billion won to the company due to conflicting interpretation of regulations regarding the calculation of royalties and depreciation period when determining the customs value.
(Main issue) The company has requested for a review of the decision as their depreciation period is in accord with the company’s accounting standards as well as relevant laws.
Resoultion and Results
(Resolution) We visited Incheon Main Customs in April 2017 and requested for a review of their decision, pointing out that unquantified royalties should not be considered in determining the customs value according to the WTO Customs Valuation Agreement and that depreciation period other than that which was accepted in the actual accounting process should not be applied according to tax laws.
(Results) The Korea Customs Service set up the Audit Decision Deliberation Committee in April 2017 and made decisions to return previously levied tariffs of 5.6 billion won to the company. The return procedure was completed in June 2017.