Skip to content

SeLim Law Firm

English

We welcome your investments in Korea.
We will provide you with the best service.

Reporting & Operation

home FDI InformationReporting & Operation
Subject
Tax Risk Point of liquor Company
Writer
Manager
Hits
584
Date
2017-08-11
File

 

 

                                                           2017.5.31

                                                           Lee,Eun Jin CTA.

 

This article is to review the tax risk of alcoholicdrink company.

. Purchase (liquor import)

1. High rate of customs and tax on liquor forimporting liquor.

Liquor purchase amount = (customs taxable value+ customs ) + tax on liquor + educational taxes + value added tax.

2. Transfer pricing taxation and customstaxable value.

(1)expensive purchase applying transfer pricingtaxation.

Inthe case of importing expensive liquor from affiliate person a normal price isapplied not dealing price. If the import is not from affiliate person dealingprice is applied.

 (2)Purchase in low price applying customs taxablevalue.

  1)(customs taxable value + customs 30% ) ……

 + tax on liquor (72% of ) ……

 + educational taxes (30% of )….

 + value added tax (10% of ++) = liquor purchaseprice.

 

 

 

2) Country in FTA can be different from othercountry.

division

Customs rate

Tax on liquor

Educational tax

Bearing tax

remarks

Beer

30%

72%

30%

152%

Customs rate can be different in EU, America, non agreement country.

Rum (whiskey)

20%

72%

30%

132%

wine

15%

30%

10%

53%

 

(3) Judgement for the down pricing on importliquor.

There is a case, down the price for liquorimport and pay with the name of consulting fee or usage fee.

It it is judged as relating with imported liquor,tax will be charged.

Relating imported good.

The payment for the trademark right for thepurchasing liquor can be shown as relating with imported liquor.

Payment for the patent, utility modelright, design right, trademark rights can be added in the importing goods andtax is charged.

 

Sales item

(1) According to the rules of accounting, taxamount for liquor is deducted in sales price. Therefore the discrepancy amountinfluence to the limitation of entertainment expenses.

(24 million or 12 million)+ 0.2% of salesamount (under sales amount 10,000 million).

(24 million or 12 million) + 20 million + 0.1%of sales amount (over 10,000 million, under 50,000 million).

24 million or 12 million + 60 million + 0.03%of sales amount ( over 50,000 million).

 

 

 

 

 

 

Prev System of Resident Registration for Korean National Abroad
Next Tax issue on the contract with overseas affiliate party