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REGULATIONS ON SPECIAL CASES CONCERNING VALUE-ADDED TAXES AND INDIVIDUAL CONSUMPTION TAXES FOR FOREIGN TOURISTS

Presidential Decree No. 11844, Jan. 9, 1986

Amended by Presidential Decree No. 14438, Dec. 23, 1994

Presidential Decree No. 14472, Dec. 31, 1994

Presidential Decree No. 15974, Dec. 31, 1998

Presidential Decree No. 16607, Dec. 3, 1999

Presidential Decree No. 16655, Dec. 31, 1999

Presidential Decree No. 17042, Dec. 29, 2000

Presidential Decree No. 17466, Dec. 31, 2001

Presidential Decree No. 18631, Dec. 31, 2004

Presidential Decree No. 20516, Dec. 31, 2007

Presidential Decree No. 20720, Feb. 29, 2008

Presidential Decree No. 22581, Dec. 30, 2010

Presidential Decree No. 24370, Feb. 15, 2013

Presidential Decree No. 24638, jun. 28, 2013

Presidential Decree No. 26488, Aug. 18, 2015

Presidential Decree No. 26831, Dec. 31, 2015

Presidential Decree No. 27840, Feb. 7, 2017

Presidential Decree No. 28514, Dec. 29, 2017

Presidential Decree No. 30393, Feb. 11, 2020

Presidential Decree No. 31380, Jan. 5, 2021

Presidential Decree No. 31445, Feb. 17, 2021

Presidential Decree No. 32417, Feb. 15, 2022

Chapter 1 General Provisions
 Article 1 (Purpose)
The purpose of this Decree is to prescribe matters mandated in Article 107 (1) through (4) of the Act on Restriction on Special Cases concerning Taxation and other matters necessary for enforcement of said provisions. <Amended on Dec. 31, 1998; Feb. 7, 2017>
 Article 2 (Scope of Foreign Tourists)
(1) The scope of foreign tourists, etc. as prescribed in Article 107 (4) of the Act on Restriction on Special Cases concerning Taxation (hereinafter referred to as the “Act”) shall be non-residents defined under the Foreign Exchange Transactions Act (hereinafter referred to as “foreign tourists”): Provided, That the following persons shall be excluded: <Amended on Dec. 31, 1998; Dec. 31, 1999; Feb. 7, 2017>
1. Corporations;
2. Diplomats stationed in the Republic of Korea (including staff working in foreign official residences);
3. Military and civilian personnel of the armed forces of the United Nations and those of America who are stationed in the Republic of Korea.
(2) Among the areas in the Republic of Korea occupied by the armed forces of the United Nations or those of the United States of America, in cases of purchasing goods from the business entities (limited to the tax-exempted sellers as prescribed in Article 4 (1)) who are engaging in retail business, tailoring, dress making or shoe-store business within the special tourist zone under the Tourism Promotion Act, paragraph (1) 3 shall not apply thereto. <Newly Inserted on Dec. 31, 2004>
 Article 3 (Scope of Target Goods)
(1) The scope of the target goods prescribed in Article 107 (4) of the Act shall be the goods excluding the following (hereinafter referred to as “duty-free goods”): <Amended on Dec. 23, 1994; Dec. 31, 1994; Dec. 31, 1998; Dec. 3, 1999; Dec. 31, 1999; Dec. 31, 2007; Feb. 29, 2008; Dec. 31, 2015; Feb. 7, 2017>
1. Deleted; <Dec. 31, 1999>
2. Firearm, swords, and explosives as prescribed in the Act on the Safety Management of Guns, Swords, and Explosives;
3. Goods designated as heritage assets pursuant to the Cultural Heritage Protection Act;
4. Addictive and habit-forming drugs pursuant to the Pharmaceutical Affairs Act;
5. Goods with a one-time transaction price including value added tax and individual consumption tax (including the education tax and the farming and fishing villages special tax to be imposed on individual consumption tax; hereinafter the same shall apply) lesser than the amount prescribed by Ordinance of the Ministry of Economy and Finance;
6. Goods, the transaction of which is restricted by statutes or regulations;
7. Goods, the sale of which needs to be restricted in order to prevent capital flight in foreign currency, wrongful distribution, etc. as prescribed by Ordinance of the Ministry of Economy and Finance.
(2) Deleted. <Dec. 30, 2010>
 Article 4 (Scope of Tax-Exempted Sellers)
(1) “Business operators prescribed by Presidential Decree” in Article 107 (1) of the Act means any business entity running a duty-free shop prescribed in paragraph (2) (hereinafter referred to as “tax-exempted seller”). <Amended on Dec. 30, 2010>
(2) “Shops prescribed by Presidential Decree” in Article 107 (2) of the Act shall mean any duty-free shop for foreign tourists designated by the head of the competent tax office pursuant to Article 5 (1) (hereinafter referred to as “duty-free shop”). <Amended on Dec. 23, 1994; Dec. 31, 1998; Dec. 29, 2000; Dec. 30, 2010>
 Article 5 (Designation of Duty-Free Shops and Revocation of Such Designation)
(1) A business entity which intends to obtain designation as a duty-free shop shall submit to the head of the competent tax office a written application for designation in the form prescribed by Ordinance of the Ministry of Economy and Finance. In such cases, if the relevant business is required to obtain permission, designation, or registration pursuant to other statute or regulation, the business entity shall attach a copy of the relevant certificate of permission, designation, or registration thereto. <Amended on Dec. 23, 1994; Dec. 31, 1998; Feb. 29, 2008; Aug. 18, 2015>
(2) The head of the competent tax office who has received an application for designation under paragraph (1) may designate a duty-free shop as requested only when the applicant satisfies all the following requirements: Provided, That in cases of a business entity which engages in the retail business, tailoring, dress making, or shoe-store business within the special tourist zone under the Tourism Promotion Act among the areas occupied by the armed forces of the United Nations or those of the United States of America, the requirement prescribed in subparagraph 1 shall not apply: <Amended on Dec. 31, 1998; Dec. 31, 1999; Dec. 29, 2000; Dec. 31, 2004; Aug. 18, 2015; Jan. 5, 2021>
1. The applicant must not be a simplified taxable person;
2. The applicant must satisfy the standards determined by the Commissioner of the National Tax Service, taking into account expected foreign-tourist users, scale of sales personnel and facilities, financial capability and credit rating, etc. required for operating the aforementioned duty-free shop;
3. Deleted; <Dec. 29, 2000>
4. Deleted. <Dec. 29, 2000>
(3) The head of the competent tax office, upon receipt of an application for designation as a duty-free shop under paragraph (1), shall determine whether to designate the relevant duty-free shop, within seven days from the date of filing the application; and when he or she has designated the duty-free shop, a certificate of a designated duty-free shop as prescribed by Ordinance of the Ministry of Economy and Finance (hereinafter referred to as “certificate of designation”) shall be delivered to the applicant: Provided, That where the head of the competent tax office has not made such designation, he or she shall notify the applicant of the ground therefor, without delay. <Amended on Dec. 23, 1994; Dec. 31, 1998; Feb. 29, 2008; Aug. 18, 2015>
(4) When a tax-exempted seller falls under any of the following subparagraphs, the head of the competent tax office may revoke the designation of the duty-free shop. In such cases, the head of the competent tax office shall, without delay, notify it to the relevant business operator and withdraw his or her certificate of designation: <Amended on Dec. 31, 1998; Dec. 31, 1999; Aug. 18, 2015; Dec. 31, 2015>
1. When the permission, designation, or registration under relevant statutes or regulations is revoked;
2. When the relevant duty-free shop is transferred or leased to other persons;
3. When the tax-exempted seller is subject to any penalty or disciplinary measure due to his or her evasion of State or local government taxes of at least 500,000 won;
4. When the tax-exempted seller fails to remit money under Article 10 and thereby is punished at least on two occasions pursuant to the Punishment of Tax Offenses Act during the single taxable period as prescribed in the Value-Added Tax Act;
5. When the tax-exempted seller is punished pursuant to the Foreign Exchange Transactions Act;
6. When the tax-exempted seller becomes disqualified for non-compliance with any of the requirements for designation prescribed in paragraph (2);
7. When the tax-exempted seller requests withdrawal of designation of his or her duty-free shop;
8. When the tax-exempted seller fails to sell any duty-free goods to foreign tourists for six months from the time his or her duty-free shop was designated;
9. When the number of hand-written certificates of sales of goods issued under the latter part of Article 8 (1) during a taxable period under the Value-Added Tax Act accounts for at least 10/100 of the total number of certificates of sales issued under Article 10 (1) during a taxable period: Provided, That this shall not apply where designation of a duty-free shop is obtained during the relevant taxable period or less than 20 certificates of sales are issued under Article 10 (1) during the relevant taxable period;
10. When at least two of the following certificates are issued at least on two occasions after dividing the value of a tax-free article during a taxable period under the Value-Added Tax Act:
(a) Electronic certificates of sales for prompt refund referred to in Article 8 (4);
(b) Certificate of sales as referred to in Article 10 (1).
(5) When a designation of a duty-free shop is revoked due to grounds prescribed in paragraph (4) 3 through 5 and 10, the tax-exempted seller may not have his or her duty-free shop designated for two years from the date when such designation is revoked. <Amended on Aug. 18, 2015; Dec. 31, 2015>
(6) Where a tax-exempted seller temporarily or permanently closes his or her business or a modification occurs in the stated matters in his or her certificate of designation, he or she shall report thereon, applying mutatis mutandis Article 8 (8) of the Value-Added Tax Act or Article 21 of the Individual Consumption Tax Act; and upon reporting the same, he or she shall submit to the head of the competent tax office (when the duty-free shop is relocated, referring to the head of the competent tax office having jurisdiction over the duty-free shop after the relocation) a report on the temporary or permanent closure of a duty-free shop for foreign tourists in the form prescribed by Ordinance of the Ministry of Economy and Finance, along with the certificate of designation. <Amended on Dec. 23, 1994; Dec. 31, 1998; Dec. 31, 2007; Feb. 29, 2008; Jun. 28, 2013; Aug. 18, 2015; Feb. 17, 2021>
(7) Upon receipt of a report submitted under paragraph (6), the head of the competent tax office shall verify the details of the modification occurred and correct the relevant matters stated in the certificate of designation and re-issue it. <Amended on Dec. 31, 1998; Aug. 18, 2015>
 Article 5-2 (Operator of Refund Counter)
(1) The Commissioner of the competent Regional Tax Office may designate a person (hereinafter referred to as “refund counter operator”) who, pursuant to Articles 10-2 and 10-4, engages in the business of returning or remitting the amount of money equivalent to the value-added tax and individual consumption tax borne by foreign tourists when they purchased duty-free goods (hereinafter referred to as “amount equivalent to tax”). <Amended on Dec. 29, 2000; Dec. 31, 2004; Dec. 31, 2007; Feb. 15, 2013>
(2) A business entity which intends to obtain designation as a refund counter operator shall submit to the Commissioner of the competent Regional Tax Office a written application for designation in the form prescribed by Ordinance of the Ministry of Economy and Finance. In such cases, if a relevant business is required to obtain permission, designation, or registration pursuant to other statutes or regulations, he or she shall attach thereto a copy of the relevant certificate of permission, designation, or registration. <Amended on Feb. 29, 2008>
(3) The Commissioner of the competent Regional Tax Office who has received an application for designation pursuant to paragraph (2) may designate the applicant as a refund counter operator only when he or she satisfies the requirements under all the following subparagraphs: <Amended on Feb. 29, 2008>
1. The applicant has his or her own means and credibility required for the relevant business;
2. The applicant must have personnel and facilities required for paying refunds;
3. The applicant must satisfy other requirements prescribed by Ordinance of the Ministry of Economy and Finance that are necessary for operating a refund counter.
(4) The Commissioner of the competent Regional Tax Office who has received an application for designation pursuant to paragraph (2) shall determine, within 30 days from the date of filing the application, whether to designate the applicant as a refund counter operator; and when he or she has designated the refund counter operator, shall deliver a certificate of designation as a refund counter operator to the applicant.
(5) In any of the following cases, the Commissioner of the competent Regional Tax Office may revoke the designation of a refund counter operator: <Amended on Dec. 30, 2010; Feb. 15, 2013>
1. When the refund counter operator falls under any of subparagraph 1, 3, or 5 of Article 5 (4);
2. When the refund counter operator ceases to satisfy the requirements for designation prescribed in paragraph (3);
3. When the refund counter operator ceases to operate the relevant business;
4. When the refund counter operator requests to revoke the designation;
5. When the refund counter operator violates any of the procedures for refund or remittance as prescribed in Articles 10-2 through 10-4.
(6) Article 5 (6) and (7) shall apply mutatis mutandis to the temporary or permanent closure of a refund counter operation business and to any modification to the matters stated in the certificate of designation.
[This Article Newly Inserted on Dec. 31, 1998]
Chapter 2 Application of Zero Tax Rate and Refund of Tax
 Article 6 (Application of Zero-Rate Value-Added Tax and Refund of Individual Consumption Tax)
(1) Where a tax-exempted seller falls under any of the following subparagraphs after selling a duty-free goods, at a duty-free shop, to a foreign tourist at a price which includes the amount equivalent to the tax thereof, the tax-exempted seller shall be eligible for the application of zero-rate value-added tax or the refund of individual consumption tax on the relevant goods: <Amended on Dec. 31, 2007; Feb. 2, 2013; Dec. 31, 2015>
1. Where, pursuant to Article 9 or 10-4, a foreign tourist is confirmed to have transferred duty-free goods to a foreign country within three months from the date when he or she purchases the goods;
2. Where a tax-exempted seller is confirmed to have remitted, pursuant to Article 10, an amount equivalent to tax to a foreign tourist or confirmed to have refunded or remitted through the refund counter operator pursuant to Article 10-2 or 10-4.
(2) Where a foreign tourist purchases a duty-free goods, meeting all the following requirements, the tax-exempted seller may sell the duty-free goods, at a duty-free shop, to the foreign tourist at the price after deducting the amount equivalent to tax thereof (hereinafter referred to as "prompt refund") and be eligible for the application of zero-rate value-added tax or the refund of individual consumption tax on the relevant goods: <Newly Inserted on Dec. 31, 2015; Dec. 29, 2017; Feb. 11, 2020; Feb. 15, 2022>
1. Where a transaction value on one occasion, including an amount equivalent to the tax, is less than 500,000 won;
2. The total transaction value, including an amount equivalent to the tax promptly refunded after the foreigner's entry, is 2.5 million won or less.
(3) Where an amount equivalent to the tax is immediately refunded by a tax-exempted seller pursuant to paragraph (2), the amount, approval for which is granted by the Commissioner of the National Tax Service to a refund counter operator may be deducted from the relevant amount equivalent to the tax as expenses, etc. incidental to such refund pursuant to Article 10-2 (2). <Newly Inserted on Dec. 31, 2015>
(1) Where a foreign tourist has not taken any goods out of the Republic of Korea within three months from the date he or she purchases duty-free goods (hereafter in this paragraph referred to as the "period for taking duty-free goods out of the Republic of Korea") pursuant to paragraph (1) or (2) after his or her entry, paragraph (2) shall not apply to duty-free goods purchased by him or her after a period for taking the relevant duty-free goods out of the Republic of Korea elapses. <Newly Inserted on Dec. 31, 2015>
 Article 7 (Exclusion from Application of Zero Tax Rate and Refund)
(1) Where a tax-exempted seller fails to receive a certificate of sales (including transmission thereof via the information and communications network; hereinafter the same shall apply) as referred to in Article 10 (1) or a certificate of refund/remittance as referred to in Article 10-3 or 10-4 (5) within 20 days after termination of the taxable period of three months from the date of sale of the relevant duty-free goods (such taxable period includes the preliminary return period and the early return period related to zero rate, etc.; hereinafter the same shall apply), the zero-rate value-added tax as prescribed in Article 6 (1) shall not apply thereto. <Amended on Dec. 31, 1998; Dec. 29, 2000; Dec. 30, 2010; Feb. 15, 2013; Dec. 31, 2015>
(2) Where a tax-exempted seller fails to receive a certificate of sales as referred to in Article 10 (1) or the certificate of refund/remittance as referred to in Article 10-3 or 10-4 (5) by the 20th of the month immediately following the month in which three months fall after the date of sale of the relevant duty-free goods, or where he or she fails to file an application for the refund of individual consumption tax prescribed in Article 12 (1) (where he or she fails to attach the required document, including the amount of refundable tax related thereto), the refund of individual consumption tax pursuant to Article 6 (1) shall not be made. <Amended on Dec. 31, 1998; Dec. 29, 2000; Dec. 31, 2007; Dec. 30, 2010; Feb. 15, 2013; Dec. 31, 2015>
Chapter 3 Sale/Transfer of Duty-Free Goods and Payment Procedures
 Article 8 (Procedures for Sale of Duty-Free Goods)
(1) When a tax-exempted seller sells a duty-free goods to a foreign tourist, the tax-exempted seller shall issue to the foreign purchaser two copies of the certificate of sales of goods for foreign tourists in the form prescribed by Ordinance of the Ministry of Economy and Finance (hereinafter referred to as “certificate of sales of goods”) and a stamped self-addressed envelope, after verifying the purchaser’s identification by checking his or her passport, etc. In such cases, he or she may deliver a hand-written certificate of sales of goods for foreign tourists in the form prescribed by Ordinance of the Ministry of Economy and Finance (hereinafter referred to as "hand-written certificate of sales of goods"), instead of the certificate of sales of goods where there exists computer failure or any other unavoidable cause. <Amended on Aug. 18, 2015>
(2) Notwithstanding paragraph (1), where a tax-exempted seller transmits a certificate of sales of goods to foreign tourists by electronic means (hereinafter referred to as "electronic certificate of sales") using the information and communications networks to a refund counter operator or the head of the customs office having jurisdiction over the relevant port of departure, he or she need not deliver the relevant certificate of sales of goods or hand-written certificate of sales of goods and a stamped self-addressed envelope. <Newly Inserted on Aug. 18, 2015>
(3) Where a tax-exempted seller sells duty-free goods pursuant to paragraph (1), he or she shall inform the relevant foreign tourist of procedures for remittance and refund.
(4) Where a tax-exempted seller sells goods to a foreign tourist making a prompt refund as referred to in Article 6 (2), he or she shall check the passport of the foreign tourist and transmit a certificate of sales of goods to foreign tourists for prompt refund by electronic means in the form prescribed by Ordinance of the Ministry of Economy and Finance (hereinafter referred to as "electronic sales certificate for prompt refund") using the information and communications network to the head of the customs office having jurisdiction over the port of departure. <Newly Inserted on Dec. 31, 2015>
[This Article Wholly Amended on Dec. 30, 2010]
 Article 9 (Confirmation of Transfer by the Head of Customs Office)
(1) Where a foreign tourist has already received or intends to receive a refund or remittance of the amount equivalent to the tax borne by him or her when he or she purchased a duty-free goods, he or she shall submit one copy of the certificate of sales of goods or hand-written certificate of sales of goods and the purchased goods to the head of the customs office having jurisdiction over the port of departure and shall obtain confirmation thereof: Provided, That where he or she sends the purchased goods via postal service or other methods of delivery, he or she may submit, in lieu of the purchased goods, the document prescribed by Ordinance of the Ministry of Economy and Finance. <Amended on Dec. 23, 1994; Dec. 31, 1998; Feb. 29, 2008; Feb. 15, 2013; Aug. 18, 2015>
(2) Notwithstanding paragraph (1), where the head of the customs office having jurisdiction over the port of departure has received an electronic certificate of sales or electronic certificate of sales for prompt refund transmitted by a tax-exempted seller or a refund counter operator, the head the customs office having jurisdiction over the port of departure may authorize a foreign tourist to waive submission of the certificate of sales or electronic certificate of sales for prompt refund: Provided, That where a transmitted electronic certificate of sales or electronic certificate of sales for prompt refund is deemed erroneous or must be verified, the head of the customs office having jurisdiction over the port of departure may request the foreign tourist to submit the receipt, etc. of the relevant goods which was issued by the tax-exempted seller. <Newly Inserted on Dec. 30, 2010; Aug. 18, 2015; Dec. 31, 2015>
(3) The head of the customs office having jurisdiction over the port of departure shall affix a seal confirming the transfer of duty-free goods prescribed by Ordinance of the Ministry of Economy and Finance (including electronic processing using the information and communications networks; hereinafter the same shall apply) on the certificate of sales of goods, hand-written certificate of sales of goods, electronic certificate of sales, or electronic certificate of sales for prompt refund and shall deliver or give such certificates to the following persons: <Amended on Dec. 31, 2015>
1. Tax-exempted seller;
2. Foreign tourist;
3. Refund counter operator.
(4) Where the head of the customs office having jurisdiction over the port of departure affixes a seal pursuant to paragraph (3), he or she may select some duty-free goods (in the case of the proviso of paragraph (1), referring to the document prescribed by Ordinance of the Ministry of Economy and Finance) presented by the relevant foreign tourist to check whether such goods match what's stated in the certificate of sales of goods, hand-written certificate of sales of goods, electronic certificate of sales, or electronic certificate of sales for prompt refund in accordance with standards prescribed by the head of the customs office having jurisdiction over the port of departure. <Newly Inserted on Dec. 31, 2015>
(5) Where the military and civilian personnel of the armed forces of the United Nations and those of the United States of America transfer, by parcel post, duty-free goods purchased under paragraph (2) 2 from areas within the Republic of Korea prescribed in paragraph (2) 2 which are occupied by the armed forces of the United Nations or those of the United States of America, paragraphs (1) through (4) shall apply mutatis mutandis thereto, as determined by the Commissioner of the Customs. In such cases, "departure from a country" shall be construed as "transfer" and "head of the customs office having jurisdiction over the port of departure" as "the head of the competent customs office". <Newly Inserted on Dec. 31, 2004; Dec. 30, 2010; Aug. 18, 2015; Dec. 31, 2015>
[This Article Wholly Amended on Dec. 31, 2015]
 Article 10 (Remittance of Amount Equivalent to Tax)
(1) Where a tax-exempted seller receives a certificate of sales of goods, hand-written certificate of sales of goods, or electronic certificate of sales (hereinafter referred to as the "certificate of sales") on which the head of the customs office having jurisdiction over the port of departure (referring to the head of the competent customs office, where Article 2 (2) is applicable; hereinafter the same shall apply) has affixed a confirmation seal pursuant to Article 9 (3), from the head of the customs office having jurisdiction over the port of departure or the relevant foreign tourist, he or she shall remit, to relevant foreign tourists, an amount equivalent to the tax borne by him or her in purchasing the duty-free goods within 20 days from the date of receipt of the certificate of sales. <Amended on Dec. 31, 1998; Dec. 31, 2004; Dec. 31, 2015>
(2) When a tax-exempted seller remits the amount equivalent to the tax prescribed in paragraph (1), he or she may deduct expenses incidental to such remittance (referring to any remittance fee, international postal service charge for remittance, and the amount determined by the Commissioner of the National Tax Service as other expenses incidental to remittance) from the amount equivalent to the tax.
 Article 10-2 (Refund or Remittance of Amount Equivalent to Tax)
(1) When a refund counter operator has received the certificate of sales confirmed by the head of the customs office having jurisdiction over the port of departure, the refund counter operator shall without delay refund or remit, to the relevant foreign tourist, an amount equivalent to the tax borne by him or her in purchasing duty-free goods, on behalf of the tax-exempted seller: Provided, That this shall not apply where the relevant foreign tourist receives a refund or remittance of the amount pursuant to Article 10-4 (3). <Amended on Dec. 29, 2000; Feb. 15, 2013>
(2) When a refund counter operator refunds or remits the amount equivalent to the tax pursuant to paragraph (1), he or she may deduct from the amount equivalent to the tax, expenses, etc. incidental to the refund or remittance, which are approved by the Commissioner of the National Tax Service. <Amended on Dec. 29, 2000; Dec. 31, 2001>
[This Article Newly Inserted on Dec. 31, 1998]
 Article 10-3 (Delivery of Certificate of Refund/Remittance)
(1) A refund counter operator who has refunded or remitted an amount equivalent to the tax to foreign tourists pursuant to Article 10-2 shall deliver to the relevant tax-exempted seller a document certifying refund or remittance (hereinafter referred to as “certificate of refund/remittance”), as prescribed by Ordinance of the Ministry of Economy and Finance. <Amended on Dec. 29, 2000; Feb. 11, 2020>
(2) Upon receipt of a certificate of refund/remittance, a tax-exempted seller shall pay to the refund counter operator the amount equivalent to the tax which he or she has refunded or remitted pursuant to Article 10-2 (1) (referring to the amount before deducting expenses incidental to the refund or remittance pursuant to paragraph (2) of that Article). <Newly Inserted on Feb. 11, 2020>
[This Article Newly Inserted on Dec. 31, 1998]
[Title Amended on Feb. 11, 2020]
 Article 10-4 (Special Cases concerning Refund of Amount Equivalent to Tax through Electronic Certificate of Sales)
(1) Notwithstanding Article 8 (1), where the amount of one time transaction, including value-added tax and individual consumption tax, does not exceed 5 million won and a foreign tourist requests refund or remittance of the amount equivalent to the tax borne by the foreign tourist in purchasing relevant duty-free goods on condition that he or she receive the confirmation of transfer by the head the customs office having jurisdiction over the port of departure pursuant to Articles 9 and 10-4 (4), a tax-exempted seller shall transmit an electronic certificate of sales to the relevant refund counter operator. <Amended on Feb. 7, 2017>
(2) A refund counter operator who has received an electronic certificate of sales pursuant to paragraph (1) shall transmit said certificate to the head the customs office having jurisdiction over the port of departure.
(3) Notwithstanding the main clause of Article 10-2 (1), a refund counter operator who has received an electronic certificate of sales pursuant to paragraph (1) shall, upon receipt of the request of a foreign tourist, refund or remit on behalf of the tax-exempted seller the amount equivalent to the tax borne by the foreign tourist in purchasing duty-free goods (limited to where the amount of one-time transaction including its value-added tax and individual consumption tax is not more than five million won) to the relevant foreign tourist. In such cases, the refund counter operator may, in order to ensure the confirmation of transfer by the head of the customs office having jurisdiction over the port of departure prescribed in Article 9 and 10-4 (4), request the relevant foreign tourist to provide a security up to the amount equivalent to the tax refunded or remitted. <Amended on Feb. 7, 2017>
(4) The head of the customs office having jurisdiction over the port of departure who has received an electronic certificate of sales pursuant to Article 8 (2) or 10-4 (2), shall affix a confirmation seal on such certificate pursuant to Article 9 (3), transmit the results of such confirmation to the refund counter operator and notify the Commissioner of the National Tax Service of the results thereof by no later than the 10th of the month immediately following the month in which the date of confirmation falls. <Amended on Dec. 31, 2015>
(5) Where a refund counter operator who has refunded or remitted an amount equivalent to the tax to a foreign tourist pursuant to Article 10-2 or 10-4 (3) receives from the head of the competent customs office, the results of confirmation in accordance with paragraph (4), the refund counter operator shall transmit the certificate of refund/remittance to the tax-exempted seller.
(6) Article 10-2 (2) shall apply mutatis mutandis where a refund counter operator refunds or remits an amount equivalent to the tax to a foreign tourist pursuant to paragraph (3), and Article 10-3 (2) shall apply mutatis mutandis where a tax-exempted seller has received a certificate of refund/remittance transmitted under paragraph (5). <Amended on Feb. 11, 2020>
[This Article Newly Inserted on Feb. 15, 2013]
Chapter 4 Procedures for Filing of Returns and Refund Procedures
 Article 11 (Return of Value-Added Tax)
(1) Where a tax-exempted seller intends to be eligible for the application of zero-rate value-added tax pursuant to Article 6 (1), he or she shall submit the relevant certificate of sales accompanied by a document certifying remittance under Article 10 (hereinafter referred to as "certificate of remittance") or the certificate of refund/remittance, in filing a return on the tax base during the taxable period in which the date of receipt of the certificate of sales or the certificate of refund/remittance falls, as well as in reporting the amount of tax or refund to the head of the competent tax office: Provided, That where an amount equivalent to the tax has been remitted but such relevant certificate of remittance cannot be attached due to any unavoidable cause, a document determined by the Commissioner of the National Tax Service may be attached in lieu of such certificate. <Amended on Dec. 31, 1998; Dec. 31, 1999; Dec. 29, 2000; Dec. 31, 2015>
(2) Notwithstanding paragraph (1), a tax-exempted seller who has received a certificate of refund/remittance transmitted by a refund counter operator pursuant to Article 10-4 (5) shall, to be eligible for the application of zero-rate value-added tax pursuant to Article 6 (1), submit the relevant certificate of refund/remittance accompanied by a detailed written record of sales and refund of duty-free goods to foreign tourists in the form prescribed by Ordinance of the Ministry of Economy and Finance (hereinafter referred to as “detailed written record of sales and refunds of duty-free goods”) when he or she reports to the head of the competent tax office pursuant to the former part of paragraph (1). <Newly Inserted on Feb. 15, 2013; Dec. 31, 2015>
(3) Where a tax-exempted seller files a return on a tax base to which zero rate is applicable under Article 6 (1), if a document prescribed in paragraph (1) or (2) is not attached thereto, the relevant tax base shall not be deemed a return prescribed in paragraph (1) or (2). <Amended on Feb. 15, 2013; Dec. 31, 2015>
(4) Where a tax-exempted seller falls under Article 7 (1), he or she shall file a return on the tax base for value-added tax and pay the amount of such tax by no later than the due date for a return for the taxable period of three months from the date of sale of the relevant duty-free goods. <Amended on Feb. 15, 2013>
(5) Where a tax-exempted seller intends to be eligible for the application of zero-rate value-added tax pursuant to Article 6 (2), he or she shall attach a detailed written record of sales of goods for prompt refund for foreign tourists in the form prescribed by Ordinance of the Ministry of Economy and Finance, when filing a return on the tax base for the taxable period during which the duty-free goods are sold, and when reporting the amount of tax or refund, to the head of the competent tax office. <Newly Inserted on Dec. 31, 2015>
 Article 12 (Application for Refund of Individual Consumption Tax)
(1) Where a tax-exempted seller intends to be eligible for the refund of individual consumption tax pursuant to Article 6, he or she shall submit, by no later than the end of the month immediately following the month in which the date of receipt of the certificate of sales or certificate of refund/remittance falls, the written application for refund of individual consumption tax in the form prescribed by Ordinance of the Ministry of Economy and Finance accompanied by the following documents: Provided, That where subparagraph 1 is applicable but a certificate of remittance cannot be attached due to any unavoidable cause, the document determined by the Commissioner of the National Tax Service may be attached in lieu of the certificate of remittance: <Amended on Dec. 31, 1998; Dec. 29, 2000; Dec. 31, 2007; Feb. 29, 2008; Feb. 15, 2013; Dec. 31, 2015>
1. Where he or she has remitted an amount equivalent to the tax to a foreign tourist, the certificate of sales and remittance;
2. Where he or she has refunded or remitted an amount through a refund counter operator, the certificate of sales and refund/remittance: Provided, That where such tax-exempted seller has received a certificate of refund/remittance transmitted by a refund counter operator pursuant to Article 10-4 (5), referring to the detailed written record of sales and refund of duty-free goods;
3. Where he or she makes a prompt refund for a foreign tourist, referring to an electronic certificate of sales for prompt refund.
(2) The head of the competent tax office who has received an application for refund of individual consumption tax pursuant to paragraph (1) shall refund the individual consumption tax to the relevant tax-exempted seller within 20 days from the date of receipt of the application for refund. In such cases, if there is any outstanding amount of tax to be paid by the tax-exempted seller, it shall be deducted from the amount of the aforementioned refund. <Amended on Dec. 31, 1998; Dec. 31, 2007>
(3) Where a tax-exempted seller of the goods prescribed in the proviso of Article 3 (1) 1 falls into Article 7 (2), he or she shall file a return on the tax base for the relevant individual consumption tax and pay the amount thereof no later than the end of the month immediately following the month in which three months fall after the date of the duty-free goods. <Amended on Dec. 31, 2007>
Chapter 5 Supplementary Provisions
 Article 13 (Relationship to Other Statutes or Regulations)
Except as otherwise provided in this Decree, statutes or regulations governing value-added tax and individual consumption tax shall apply to the value-added tax and individual consumption tax on duty-free goods. <Amended on Dec. 31, 2007>
 Article 14 (Orders)
(1) The Commissioner of the National Tax Service, the Commissioner of the competent Regional Tax Office or the head of the competent tax office may order a tax-exempted seller the following matters: <Amended on December 31, 1998>
1. An indication of a duty-free shop;
2. Posting or notifying a notice concerning the matters of which foreign tourists are required to be aware;
3. Detailed matters concerning remittance such as bearing expenses for remittance and methods of remittance;
4. Other matters required for enforcement.
(2) The Commissioner of the National Tax Service, the Commissioner of the competent Regional Tax Office or the head of the competent tax office may order a refund counter operator to perform the following: <Newly Inserted on Dec. 31, 1998>
1. Indication of the existence of a refund counter;
2. Posting or providing a notice concerning the matters that are required to be known by foreign tourists;
3. Submission of the documents necessary for tax perpetuation, and a report concerning businesses.
 Article 15 (Delivery of Detailed Statement of Transfer/Sales of the Goods Subject to Individual Consumption Tax)
(1) Any person who intends to transfer or sell goods subject to imposition of individual consumption tax into a duty-free shop shall deliver to the relevant tax-exempted seller a detailed statement of transfer (sale) of the goods subject to imposition of individual consumption tax prescribed by Ordinance of the Ministry of Economy and Finance (in cases of imported goods, referring to a copy of the certificate of completion of import declaration). <Amended on Dec. 23, 1994; Dec. 31, 1998; Dec. 31, 2007; Feb. 29, 2008>
(2) A tax-exempted seller who has received a detailed statement of transfer (sale) of goods subject to imposition of individual consumption tax shall keep it at the duty-free shop. <Amended on Dec. 31, 2007>
[This Article Wholly Amended on Dec. 31, 2007]
 Article 16 Deleted. <Dec. 31, 1998>
ADDENDA <Presidential Decree No. 11844, Jan. 9, 1986>
(1) (Enforcement Date) This Decree shall enter into force on April 1, 1986: Provided, That Articles 5, 14 and 15 shall enter into force on the date of promulgation of this Decree.
(2) (General Applicable Case) This Decree shall begin to apply from the first portion supplied or sold after this Decree enters into force.
ADDENDA <Presidential Decree No. 14438, Dec. 23, 1994>
Article 1 (Enforcement Date)
This Decree shall enter into force on the date of its promulgation.
Articles 2 through 5 Omitted.
ADDENDA <Presidential Decree No. 14472, Dec. 31, 1994>
Article 1 (Enforcement Date)
This Decree shall enter into force on January 1, 1995. <Proviso Omitted>
Articles 2 through 6 Omitted.
ADDENDA <Presidential Decree No. 15974, Dec 31, 1998>
(1) (Enforcement Date) This Decree shall enter into force on July 1, 1999.
(2) (General Applicable Case) This Decree shall begin to apply from the first portion supplied or sold after this Decree enters into force.
ADDENDA <Presidential Decree No. 16607, Dec. 3, 1999>
Article 1 (Enforcement Date)
This Decree shall enter into force on the date of its promulgation. <Proviso Omitted>
Articles 2 through 7 Omitted.
ADDENDA <Presidential Decree No. 16655, Dec. 31, 1999>
(1) (Enforcement Date) This Decree shall enter into force on January 1, 2000: Provided, That the amended provisions of Article 5 (2) 4 shall enter into force on July 1, 2000.
(2) (General Applicable Case) This Decree shall begin to apply from first portion supplied or sold after this Decree enters into force.
ADDENDA <Presidential Decree No. 17042, Dec. 29, 2000>
(1) (Enforcement Date) This Decree shall enter into force on January 1, 2001.
(2) (General Applicable Case) This Decree shall begin to apply from the first batch of duty-free shops designated or the first amount of money remitted by an operator of refund counter for the first time after this Decree enters into force.
ADDENDA <Presidential Decree No. 17466, Dec. 31, 2001>
(1) (Enforcement Date) This Decree shall enter into force on January 1, 2002.
(2) (General Applicable Case) This Decree shall begin to apply from the first money refunded or remitted by an operator of refund counter after this Decree enters into force.
(3) (Transitional Measures concerning Expenses, etc. for Refund or Remittance) The expenses, etc. determined by an operator of refund counter in accordance with the instruction by the Commissioner of the National Tax Service pursuant to the former provision of Article 10-2 (2) as at the time this Decree enters into force shall be deemed to be approved by the Commissioner of the National Tax Service pursuant to the amended provision of Article 10-2 (2).
ADDENDA <Presidential Decree No. 18631, Dec. 31, 2004>
(1) (Enforcement Date) This Decree shall enter into force on January 1, 2006.
(2) (General Applicable Case) This Decree shall begin to apply from the first portion supplied after this Decree enters into force.
ADDENDA <Presidential Decree No. 20516, Dec. 31, 2007>
Article 1 (Enforcement Date)
This Decree shall enter into force on January 1, 2008.
Articles 2 through 7 Omitted.
ADDENDA <Presidential Decree No. 20720, Feb. 29, 2008>
Article 1 (Enforcement Date)
This Decree shall enter into force on the date of its promulgation: Provided, That, among the Presidential Decrees to be amended pursuant to Article 8 of the Addenda, the amended provisions of those Presidential Decrees which have not yet entered into force, although promulgated before this Decree enters into force, shall enter into force on each date of enforcement of the Presidential Decree concerned.
Articles 2 through 8 Omitted.
ADDENDA <Presidential Decree No. 22581, Dec. 30, 2010>
Article 1 (Enforcement Date)
This Decree shall enter into force on the date of its promulgation: Provided, That the amended provisions of Article 3 (2) and 5-2 (5) shall enter into force on April 1, 2011.
Article 2 (Applicable Case concerning the Procedure for Refund and Remittance through Transferring Electronic Sales Certificate)
The amended provisions of Articles 8 and 9 shall begin to apply from the first cases where a foreign tourist, etc. purchases a duty-free goods at a duty-free shop, after this Decree enters into force.
ADDENDA <Presidential Decree No. 24370, Feb. 15, 2013>
Article 1 (Enforcement Date)
This Decree shall enter into force on July 1, 2013: Provided, That the amended provisions of Article 9 (5) shall enter into force on the date of its promulgation.
Article 2 (General Applicable Case)
This Decree shall begin to apply from the portion of purchasing the duty-free goods by foreign tourists, etc. at duty-free shops after July 1, 2013.
Article 3 (Applicable Case concerning Confirmation of Transfer, Etc. by the Head of the Customs Office)
The amended provisions of Article 9 (5) shall begin to apply from the portion of the transfer to be confirmed by the head of the customs office having jurisdiction over the port of departure after the date of enforcement as prescribed in the proviso to Article 1 of the Addenda.
Article 4 (Applicable Case concerning Return of Value-Added Tax)
The amended provisions of Article 11 (2) and (3) shall begin to apply from the first portion of returning the value-added tax on the duty-free goods purchased after July 1, 2013 by foreign tourists, etc. at duty-free shops.
Article 5 (Applicable Case concerning Request for Refund of Individual Consumption Tax)
The amended provisions of the proviso to Article 12 (1) 2 shall begin to apply from the first requesting refund of individual consumption tax with respect to the duty-free goods purchased after July 1, 2013 by foreign tourists, etc. at duty-free shops.
ADDENDA<Presidential Decree No. 24638, Jun. 28, 2013>
Article 1 (Enforcement Date)
This Decree shall enter into force on July 1, 2013. <Proviso Omitted>
Articles 2 through 17 Omitted.
ADDENDA <Presidential Decree No. 26488, Aug. 18, 2015>
Article 1 (Enforcement Date)
This Decree shall enter into force on the date of its promulgation.
Article 2 (Applicability concerning Revocation of Designation of Duty-free Shops)
The amended provisions of Article 5 (4) 9 shall apply, beginning with the first certificate of sales issued after this Decree enters into force. In such cases, the taxable period where the enforcement date of this Decree belongs shall be construed as the period from the enforcement date of this Decree until December 31, 2015.
Article 3 (Applicability concerning Confirmation of Transfer by Head of Customs Office)
The amended provisions of the former part of Article 9 (5) shall also apply where duty-free goods purchased before this Decree enters into force are confirmed by the head of the customs office having jurisdiction over the port of departure after this Decree enters into force.
ADDENDA <Presidential Decree No. 26831, Dec. 31, 2015>
Article 1 (Enforcement Date)
This Decree shall enter into force on January 1, 2016.
Article 2 (Applicability concerning Revocation of Designation of Duty-free Shops)
The amended provisions of Article 5 (4) 10 shall apply, beginning with an electronic certificate of sales for prompt refund or a certificate of sales issued after this Decree enters into force.
Article 3 (Applicability concerning Prompt Refund of Duty-free Shops)
The amended provisions of Article 6 and Article 8 (4) shall apply, beginning with a case where a foreign tourist purchases any duty-free goods at duty-free shops and obtains prompt refund thereof after this Decree enters into force.
Article 4 (Applicability concerning Confirmation of Transfer by Head of Customs Office)
The amended provisions of Article 9 and Article 10-4 (4) shall also apply where duty-free goods purchased by foreign tourists at duty-free shops before this Decree enters into force are confirmed by the head of the customs office having jurisdiction over the port of departure after this Decree enters into force.
Article 5 (Applicability concerning Reports on Value-added Tax)
The amended provisions of Article 11 (5) shall apply, beginning with a case where a foreign tourist reports the value-added tax for his/her prompt refund at duty-free shops after this Decree enters into force.
Article 6 (Applicability concerning Applications for Refund of Individual Consumption Tax)
The amended provisions of Article 12 (1) (limited to a part regarding applications for refund concerning portion of prompt refund) shall apply, beginning with a case where a foreign tourist files an application for refund of the individual consumption tax for a portion of prompt refund at duty-free shops after this Decree enters into force.
ADDENDA <Presidential Decree No. 27840, Feb. 7, 2017>
Article 1 (Enforcement Date)
This Decree shall enter into force on the date of its promulgation.
Article 2 (Applicability concerning Refund, Etc. of Amount Equivalent to Tax through Electronic Certificate of Sales)
The amended provisions of Article 10-4 (1) and (3) shall apply, beginning with duty free goods purchased by foreign tourists at duty-free shops after this Decree enters into force.
ADDENDA <Presidential Decree No. 28514, Dec. 29, 2017>
Article 1 (Enforcement Date)
This Decree shall enter into force on the date of its promulgation.
Article 2 (Applicability concerning Prompt Refund at Duty-Free Shop)
The amended provisions of Article 6 (2)　1 shall apply, beginning with cases where a foreign tourist purchases duty free goods at a duty-free shop and receives a prompt refund after this Decree enters into force.
ADDENDA <Presidential Decree No. 30393, Feb. 11, 2020>
Article 1 (Enforcement Date)
This Decree shall enter into force on April 1, 2020: Provided, That the amended provisions of Article 10-3 and Article 10-4 (6) shall enter into force on the date of the promulgation.
Article 2 (Applicability to Prompt Refund at Duty-Free Shops)
The amended provisions of Article 6 (2) shall begin to apply where a foreign tourist purchases a duty-free goods at a duty-free shop on or after April 1, 2020.
ADDENDUM <Presidential Decree No. 31380, Jan. 5, 2021>
This Decree shall enter into force on the date of its promulgation. (Proviso Omitted.)
ADDENDA <Presidential Decree No. 31445, Feb. 17, 2021>
Article 1 (Enforcement Date)
This Decree shall enter into force on the date of its promulgation. (Proviso Omitted.)
Articles 2 through 21 Omitted.
ADDENDA <Presidential Decree No. 32417, Feb. 15, 2022>
Article 1 (Enforcement Date)
This Decree shall enter into force on April 1, 2022.
Article 2 (Applicability to Increase in Upper limit of Prompt Refund at Duty-Free Shop)
The amended provisions of Article 6 (2) 2 shall begin to apply where a foreign tourist purchases a duty-free goods at a duty-free shop after this Decree enters into force.