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| Korea Customs Service (KCS) Commissioner Yoon Tae-sik, second from right, inspects goods that are purchased from online shopping malls abroad at a customs clearance area of Incheon International Airport in this photo take in May. Courtesy of KCS |
By Yi Whan-woo
The Korea Customs Service (KCS) is considering levying taxes on intermediaries that purchase goods from abroad on behalf of domestic customers and handle relevant customs clearance processes, according to sources familiar with the matter, Monday.
The KCS' move comes as more customers in Korea want to buy goods via online malls overseas on the basis of price, quality, scarcity and other reasons.
At the same time, many of them want to avoid dealing with customs procedures that can be perceived as complex and cumbersome.
They accordingly shop through intermediaries, who make shopping easier and more convenient in return for commission.
The law on e-commerce does not stipulate collecting tax from intermediaries over the profit they make.
They are also exempt from penalty and other forms of punishment, in case they falsely report prices of imported goods in an attempt to make a higher profit margin.
According to the sources, in a feasibility study recently outsourced to a private research institute, the KCS looked to ascertain the likelihood of being able to revise the aforementioned law.
"The customs agency's inquiry is seen as reasonable considering purchase of goods from overseas online malls becoming a common shopping trend and profits of intermediaries are growing at a significant level," one source said. "The agency can be trying to bring the intermediaries into its radar in terms of legal monitoring."
The targeted businesses include brokered shopping websites and delivery companies.
"A wide range of measures are expected to come up through a feasibility study to monitor them effectively," another source said.
According to the KCS, the number of imports through e-commerce has more than doubled to 88.3 million between 2019 and 2021.
During the cited period, e-commerce also accounted for more than 80 percent of all methods of import.
The number of customers shopping at overseas online malls increased by 59.5 percent to 14.7 million in the 2019-21 period.
Meanwhile, the Ministry of Economy and Finance, which oversees the KCS, suggested offering incentives for intermediaries and other e-commerce companies to facilitate their cooperation concerning customs procedures.
The suggestion was made in the ministry's tax code revision proposed in late July. The proposal is planned to be submitted to the National Assembly for approval before Sept. 2.
