Tax Credits and Refund

(j) Goods carried out for display at foreign exhibition grounds

(k) Re-imported goods on which individual consumption tax was imposed and credit or refund was not granted thereon

(l) Goods to be used for the secret service of the chief of state

c. Miscellaneous Rule

(1) In the case where the Individual Consumption Tax is collected with respect to the goods for which the conditions for exemption are not satisfied, the tax amount paid or payable on the raw materials of the said goods is not creditable or refundable.

(2) Penalty taxes chargeable on the goods subject to Individual Consumption Tax are not creditable or refundable.

Chapter VIII: Liquor Tax

1. Taxpayer

a. Manufacturers of liquor and persons taking over liquor from a bonded area are liable to liquor tax on the liquor carried out of the manufacturing premises or taken out of the bonded area.

b. A person who intends to manufacture or sell liquor must get a manufacturing license or a selling license from the government.

2. Tax Base

a. Spirits (alcohol content 85% or more): the volume of liquor carried out of the brewery or taken out of a bonded area

b. Liquor other than spirits: the price of liquor carried out of the brewery or taken out of a bonded area

3. Tax Rates

a. Spirits (specific tax system)

57,000 won per ㎘(600 won is added for every additional 1% which exceeds 95% of alcohol content)

b. Other Liquor (ad valorem tax system) (1) Fermented Liquor

(a) Beer 72%

(b) Fruit wine 30%

(c) Takju (cloudy rice wine) 5%

(d) Yakju (clear rice wine) 30%

(e) Cheongju (Korean sake) 30%

(2) Distilled Liquor

(a) Soju 72%

(b) Whisky 72%

(c) Brandy 72%

(d) General distilled liquor 72%

(3) Liqueur 72%

(4) Other liquors

(a) Liquors made by fermenting method other than fermented liquor: 30%

(b) Liquors, except distilled liquor mixed with the fermented method and neutral spirits or distilled liquor: 72%

4. Tax Returns and Payment

a. A liquor manufacturer who carries liquor out of the manufacturing premises must file a return including the type of liquor, the degree of alcohol contained, the quantity, the price, the tax rate, the calculated amount of tax, the amount of tax to be credited or refunded, and the tax amount due on a quarterly basis to the head of the district tax office having jurisdiction over the place of tax payment by 25^th of the month following the quarter in which the liquor is carried out of the manufacturing premises.

b. With respect to liquor taken out of a bonded area, the return must be filed and the recipient must pay the tax at the time of takeover.

c. Where the return has not been filed, or the contents or filed return are not proper, the government will determine the tax base and the tax amount due.

5. Exemptions

The following items of liquor are exempt from liquor tax:

a. Liquor to be exported

b. Liquor supplied to foreign military forces stationed in Korea c. Liquor supplied to Korean forces stationed abroad

d. Liquor supplied to foreign diplomatic missions in Korea e. Liquor supplied to lounges for foreign crews

f. Liquor imported by foreign diplomatic missions for official use and by diplomatic officials for self-use

g. Liquor presented from a foreign country for ceremonial use by temples, churches, and other religious institutions

h. Liquor collected for the purpose of examination according to the Liquor Tax Law or the Food Sanitation Law

i. Liquor carried by tourists and exempted from customs duties

j. Liquor used for the purpose of public release of the intangible cultural asset and manufactured by an artisan whose manufacturing method is designated as a national intangible cultural asset by the Cultural Properties Protection Law

k. Liquor used for the material for medicine according to the Pharmaceutical Affairs Act

Chapter IX: Stamp Tax

1. Taxpayer

a. Stamp tax is levied on a person who prepares a document certifying establishment, transfer, or change of rights to property in Korea.

b. In the case where two or more persons jointly prepare a document, they are jointly and severally liable to pay stamp tax on the document concerned.

2. Taxable Documents and Tax Amount

Taxable document Value stated on the deed Tax amount 1. Deed of contract concerning

the transfer of the ownership of real estate, vessel, aircraft, or

business

10 -30 million won 30 - 50 million won 50 - 100 million won 100 million - 1 billion won

Over 1 billion won

20,000 won 40,000 won 70,000 won 150,000 won 350,000 won 2. Deed of contract concerning

loans for consumption 3. Deed of contract concerning

contract for work 4. Deed concerning the transfer of

mining rights, intangible property right, fishing right, copyright, or firm name right 5. Deed concerning rights of

usable facilities (Golf and condominium membership cards) 6. Deed concerning the transfer of

registered movable property (car, heavy machinery, vessel)

N/A 3,000 won

7. Deed concerning transactions conducted on a continuous/

repetitive basis a. Application form for a credit

N/A

1,000 won

card

b. Contract or application form for wired telephone service c. Application form for credit card

merchant

1,000won

300won

10. Gift voucher, prepaid card

Over100,000won 50,000 – 100,000 won

10,000 – 50,000 won 10,000 won

800 won 400won 200 won 50 won 11. Share certificate, bond,

investment certificate, beneficiary certificate

N/A 400 won

12. Deposit or savings certificate or passbook, repurchase agreement, insurance policy

and trust certificate or passbook

N/A 100 won

13. Deed of contract concerning

lease or deferred payment sale N/A 10,000 won

14. Deed concerning guarantee of an obligation:

a. Deed issued by a bank b. Deed issued by the Credit

Guarantee Fund c. Deed issued by an insurer

N/A 10,000 won

1,000 won 200 won

* Stamp tax is levied on a copy of deed basis or on a per volume of passbook basis.

3. Payment

A taxpayer preparing a taxable document shall pay stamp tax by putting a stamp on the document. However, the commissioner of Korean Intellectual Property Office (KIPO) has the authority to collect and pay stamp tax on the transfer of intellectual property right.

In the case of taxable documents prepared on a continuous/repetitive basis, the director of the tax office concerned may permit the taxpayer to pay the tax in cash by the tenth day of the month following the month in which the document is prepared, if the taxpayer applies for such payment method.

4. Non-Taxable Documents

a. Documents prepared by the government or localauthorities

b. Documents prepared with respect to the treatment of treasury funds

c. Documents submitted to government agencies with respect to a donation for public works

d. Documents prepared by charity or relief organizations with respect to their businesses

e. Certificates of acceptance or guarantee of bills f. Copies or transcripts of negotiable securities

g. Deeds of contract concerning the ownership of a residential house valued at 100 million won and less

h. Deeds of contract concerning loans for consumption of 50 million won or less

i. Currency stabilization bonds issued by the Bank of Korea

j. Bonds issued by international financial bodies and deeds prepared with respect to the issuance of such bonds

k. Deeds concerning things only for mail in accordance with the Postal Service Act

5. Penalty Tax

If a taxpayer did not pay the stamp tax due or the paid amount is less than the due amount, an amount equivalent to 300% of the outstanding tax amount is charged as penalty tax.