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Exporting alcoholic drinks from South Korea

In South Korea, alcoholic drinks are taxed when released from the manufactory, and exported drinks are exempt from liquor tax under the Liquor Tax Act. Drinks may also be released untaxed to another place for export with a local letter of credit or purchase certificate. Tax is collected if export is not proven. Exports are declared to customs.

Updated · Each section links to the official source it comes from

Main laws
Liquor Tax Act (주세법); Liquor License Act (주류 면허 등에 관한 법률)
Manufacturer
Licence from the competent tax office, by plant and type
Exported drinks
Exempt from liquor tax (Article 20(1), Liquor Tax Act)
Release for export
Untaxed with a local L/C or purchase certificate (Article 17)
Proof of export
Tax collected if export is not proven in time
Export declaration
To the head of a customs office (Customs Act)

Before the goods leave

The questions to answer, in the order they usually come up.

  1. 1Does the maker hold a liquor manufacturing licence for this type of liquor at this plant? Read more
  2. 2Will the drinks be exported directly, or released untaxed to another place for export? Read more
  3. 3Is there a local letter of credit or purchase certificate for an untaxed release? Read more
  4. 4Can export be proven within the period set, to keep the exemption? Read more
  5. 5Is the export declaration ready? Read more
  6. 6Does the buyer need a certificate of origin or FTA proof of origin? Read more

The rules, by area

What each area covers, the texts that set it, and what the official pages say.

The liquor manufacturing licence

Who may make liquor in Korea.

  • Any person who intends to manufacture liquor obtains a licence from the head of the competent tax office, meeting the facility standards for each plant and each type of liquor under the Liquor Tax Act (Article 3(1), Liquor License Act).
  • The head of the competent tax office may suspend the manufacture or shipping-out of liquor for up to three months for listed breaches, such as making liquor outside the Liquor Tax Act's specifications (Article 11).
  • A liquor manufacturer reports a trademark to the competent tax office at least two days before using or changing it (Article 18(2)).

How we help: Compliant Always keeps the manufacturing licence and trademark reports with each product, dated, and answers importers' questions about them from the record. Ask about this

Liquor tax on exported drinks

The exemption for exports, untaxed release for export, and what happens if export is not proven.

  • Liquor tax is paid by the person who manufactures alcoholic drinks and releases them from a manufactory (Article 3, Liquor Tax Act).
  • Alcoholic drinks that are exported are exempt from liquor tax, as Presidential Decree prescribes (Article 20(1)1).
  • Drinks released to another place for export are not taxed if there is a local letter of credit or a purchase certificate under the Foreign Trade Act; the release needs approval from the head of the competent tax or customs office (Article 17(1) and (2)).
  • If carriage to that place is not proven, the tax is collected from the person who released the drinks, and the person who carried them in reports it by the 10th of the following month (Article 17(3) and (5)).
  • Tax is collected without delay on exempt drinks whose export is not proven within the period set (Article 20(3)); the office may require security equal to the tax (Article 20(4)).
  • Exported drinks returned to the maker's manufactory because of deterioration or poor quality are exempt on re-import (Article 20(2)7).

How we help: Compliant Always keeps the release approvals, letters of credit or purchase certificates and the proof of export with each shipment, dated, and shows what is missing before the deadline. Ask about this

Export declaration to customs

The Customs Act declaration for goods leaving Korea, and the checks customs makes on it.

  • A person who intends to export goods declares their names, standards, quantities and values, and other matters set by Presidential Decree, to the head of a customs office (Article 241(1), Customs Act).
  • The declaration is filed in the name of the owner of the goods or a licensed customs broker; an export declaration may also be filed in the name of the manufacturer that supplied the goods to the owner (Article 242).
  • For personal effects, consignments, unaccompanied goods and postal items, the declaration may be omitted or simplified as Presidential Decree prescribes (Article 241(2)).
  • Goods needing a permit, approval or label under other statutes at export are checked by customs for it at clearance (Article 226).
  • Korea Customs Service (KCS): the declaration goes to the customs office with jurisdiction over the place where the goods are stored, and customs may review documents or inspect the goods.
  • Goods are loaded onto the means of transport within 30 days of the declaration being accepted, extendable up to one year; otherwise acceptance may be revoked (Article 251).
  • KCS: a false declaration, or export without one, may be punished as a false report, smuggling or price manipulation under the Customs Act.

How we help: Compliant Always keeps the invoice, packing details and permits behind each declaration with the shipment and lot, dated, and shows what is missing before the goods are declared. Ask about this

Origin marking and certificates of origin

Marking origin on goods, certificates of origin for exported goods, and proving origin to claim a free trade agreement rate in the destination.

  • Goods the Minister has publicly announced as subject to origin marking are marked when exported or imported; false or misleading marks are prohibited (Article 33, Foreign Trade Act).
  • A certificate of origin for exported goods is applied for under Article 37 of the Foreign Trade Act, on payment of a fee.
  • Under a free trade agreement, a certificate of origin is either issued by an agency after it verifies the origin, or prepared and signed by the exporter, producer or importer, as the agreement provides (Article 11, FTA Customs Act).
  • An approved exporter certified by KCS may prove origin itself and use simplified procedures where the agreement allows (Article 12).
  • An exporter or producer that finds an error in a document evidencing origin notifies the customs office and the importer (Article 14); documents evidencing origin are kept for up to five years, or longer where the agreement says so (Article 15).
  • KCS issues a Certificate of Non-Manipulation for goods in transit or stored in a bonded area, used to show direct consignment under an FTA.

How we help: Compliant Always keeps origin workings, certificates and supplier declarations with the shipment, dated, and reads them against what the destination asks for. Ask about this

Who answers for what

WhoWhat they answer forHow we help
Liquor manufacturerThe manufacturing licence, the tax-free release and proving export.Licence, approvals and export proof kept with each lot, dated.
Exporter or trading companyThe local letter of credit or purchase certificate, the export declaration and origin documents.The papers behind each release and declaration in one record.
Customs broker or forwarderFiling the export declaration and loading within 30 days of acceptance.Declarations matched to the release they prove.
Competent tax officeLicensing manufacture, approving untaxed releases and collecting tax where export is not proven.Approvals and proofs ready when the office asks.

Where are the goods going?

Most of what alcoholic drinks have to meet is set where they are sold. Each guide sets out the rules on arrival, with the official source for each.

Questions businesses ask

Do I pay liquor tax on soju I export from South Korea?
No. Alcoholic drinks that are exported are exempt from liquor tax under Article 20(1) of the Liquor Tax Act, as Presidential Decree prescribes. Tax is collected if export is not proven within the period set.
Can I move drinks tax-free to an exporter's warehouse?
Drinks released to another place for export are not taxed if there is a local letter of credit or a purchase certificate under the Foreign Trade Act, with approval from the competent tax or customs office (Article 17, Liquor Tax Act).
What is a purchase certificate?
A document the Minister of Trade, Industry and Resources may issue certifying that goods are bought to earn foreign currency, for the zero VAT rate (Article 18, Foreign Trade Act). The Liquor Tax Act accepts it for untaxed release for export.
What happens if the export is not proven?
The head of the competent tax or customs office collects the liquor tax without delay from the manufacturer (Article 20(3), Liquor Tax Act). The office may also require security equal to the tax (Article 20(4)).
Do I need a licence to make makkoli (makgeolli) for export?
Yes. Any person who intends to manufacture liquor obtains a licence from the head of the competent tax office for each plant and type of liquor (Article 3, Liquor License Act). Article 3 does not distinguish liquor made for export.
What if exported drinks come back damaged?
Exported drinks returned to one of the maker's manufactories because of deterioration, poor quality or other unavoidable causes are exempt from liquor tax (Article 20(2)7, Liquor Tax Act).
How long after the export declaration must the drinks be loaded?
Within 30 days of acceptance, extendable up to one year; otherwise customs may revoke the acceptance (Article 251, Customs Act).
Can my buyer claim a free trade agreement rate on Korean beer?
If it meets the agreement's origin rules. A certificate of origin is issued by an agency or prepared by the exporter, producer or importer, as the agreement provides, and kept for up to five years (Articles 11 and 15, FTA Customs Act).
How does Compliant Always help with exporting from South Korea?
Our team reads the rules for the routes you ship. Compliant Always shows which export documents apply to your product, keeps them with the shipment beside what the destination asks for, and watches the sources for changes. It shows what the requirements say and what your documents show; you decide.

Sources

Compliant Always is a product of Lettuce Labs LLC. It shows what requirements say and what your documents show. It is not legal advice, and you decide.

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