INDIVIDUAL CONSUMPTION TAX ACT

Article 1(Taxable Objects and Tax Rates) #

(1) The individual consumption tax shall be levied on specific goods, admission to specific places, entertaining, eating, and drinking at specific places, and business activities at specific places. <Amended on Jan. 1, 2010>

(2) The goods on which the individual consumption tax shall be levied (hereinafter referred to as "taxable goods"), and the tax rates therefor are as follows: <Amended on Dec. 3, 1999; Dec. 29, 2000; Dec. 15, 2001; Jul. 26, 2003; Oct. 16, 2004; Jul. 8, 2005; Dec. 31, 2005; Dec. 31, 2007; Mar. 28, 2008; Dec. 26, 2008; Jan. 1, 2010; Dec. 2, 2011; Dec. 31, 2011; Jan. 1, 2013; Jan. 1, 2014; Dec. 23, 2014; Dec. 15, 2015; Dec. 20, 2016; Dec. 19, 2017; Dec. 31, 2018; Jun. 9, 2020; Dec. 22, 2020>

1. Tax rates of 20/100 of the price shall apply to the following goods:

(a) Slot machines, speculation machines for amusement, and other amusement goods;

(b) Hunting guns;

2. The specified tax rates shall apply to the portions of the prices of the following goods (hereinafter referred to as "taxable prices") which exceed the standard prices prescribed by Presidential Decree (hereinafter referred to as "standard prices"):

(a) 20/100 of the taxable prices of the following goods:

(i) Jewelry (excluding diamond for industrial use and unprocessed raw ore and bare stones), pearl, tortoise shell, coral, amber, and ivory, and the products made thereof (including products using bare stones);

(ii) Precious metal products;

(iii) Deleted; <Dec. 15, 2015>

(iv) High-quality watches;

(v) High-quality carpets;

(vi) High-quality bags;

(b) 20/100 of the taxable prices of the following goods:

(i) High-quality fur and the products made thereof (excluding rabbit fur and the products made thereof, and raw fur);

(ii) High-quality furniture;

3. The specified tax rates shall apply to the prices of the following vehicles:

(a) Passenger vehicles and vehicles for camping in excess of 2,000-cubic centimeter engine displacement: 5/100;

(b) Passenger vehicles and two-wheeled vehicles of up to 2,000-cubic centimeter engine displacement (excluding those of up to 1,000-cubic centimeter engine displacement which comply with the specifications prescribed by Presidential Decree): 5/100;

(c) Electric passenger vehicles (excluding those of which specifications are prescribed by Presidential Decree in consideration of the detailed criteria referred to in Article 3 (2) of the Motor Vehicle Management Act): 5/100;

4. The specified tax rates shall apply to the volume of the following goods:

(a) Gasoline and substitute oil similar thereto: 475 won per liter;

(b) Light oil and substitute oil similar thereto: 340 won per liter;

(d) Heavy oil and substitute oil similar thereto: 17 won per liter;

(e) Propane (including mixtures of propane and butane, which are prescribed by Presidential Decree) among petroleum gases (including liquefied gas; hereinafter the same shall apply): 20 won per kilogram;

(f) Butane (including mixtures of butane and propane, which do not fall under item (e)) among petroleum gases: 252 won per kilogram;

(g) Natural gas (including liquefied gas; hereinafter the same shall apply): 12 won per kilogram: Provided, That in cases of natural gas used for any other purposes than power generation (referring to natural gas prescribed by Ordinance of the Ministry of Economy and Finance) shall be 60 won per kilogram;

(h) Oils produced as by-products in the process of manufacturing goods, other than petroleum products, which are prescribed by Presidential Decree: 90 won per liter;

(i) Bituminous coal: 46 won per kilogram;

5. Deleted; <Dec. 20, 2016>

6. The tax rates applicable to different types of tobacco (referring to any of the following) are as specified in the attached Table:

(a) Tobacco defined in subparagraph 1 of Article 2 of the Tobacco Business Act;

(b) Products similar to item (a), manufactured in a state suitable for smoking, sucking, inhaling in the form of steam, chewing, or sniffing, by using tobacco plants other than their leaves, as all or part of the raw material;

(3) The places on which the individual consumption tax is levied for admission (including the use of relevant facilities and articles; hereinafter the same shall apply) (hereinafter referred to as "taxable places"), and the tax rates therefor shall be as follows: <Amended on Jan. 1, 2010; Dec. 27, 2010; Jan. 1, 2014; Dec. 15, 2015>

1. Horse race tracks: 1,000 won per person per admission: Provided, That the rate applicable to off-course betting facilities shall be 2,000 won;

2. Bicycle race tracks and boat race courses: 400 won per person per admission: Provided, That the rate applicable to off-course betting facilities shall be 800 won;

3. Places in which a slot machine is installed: 10,000 won per single person's admission;

4. Golf courses: 12,000 won per single person's admission;

5. Casinos: 50,000 won per single person's admission (6,300 won per single person's admission in cases of casinos licensed under Article 11 of the Special Act on the Assistance to the Development of Abandoned Mine Areas): Provided, That 2,000 won per single person's admission in cases of foreigners.

(4) The places on which the individual consumption tax is levied for entertaining, eating, and drinking (hereinafter referred to as "taxable entertainment place"), and the tax rates therefor shall be as follows: <Amended on Jan. 1, 2010>

Entertainment bars, foreigner-only entertainment and eating establishments, and other similar places: 10/100 of a charge for entertainment and eating.

(5) The places on which the individual consumption tax is levied for business activities (hereinafter referred to as "taxable business place"), and the tax rates therefor shall be as follows: <Amended on Jan. 1, 2010>

Casinos licensed under Article 5 (1) of the Tourism Promotion Act (including casinos licensed under Article 11 of the Special Act on the Assistance to the Development of Abandoned Mine Areas): Any of the following applicable tax rates based on the annual turnover (referring to the turnover in Article 30 (1) of the Tourism Promotion Act; hereinafter the same shall apply):

(6) Sub-categories and kinds of the taxable goods (excluding those specified in paragraph (2) 2 (b) (i), paragraph (2) 4 (e) and (f), and paragraph (2) 6), taxable places, taxable entertainment places, and taxable business places shall be prescribed by Presidential Decree. <Amended on Jan. 1, 2010; Dec. 23, 2014>

(7) The tax rates referred to in paragraphs (2) and (3) may be adjusted by Presidential Decree within the scope of 30/100 thereof (50/100 by December 31, 2024, in the case of each item of paragraph (2) 4), if necessary for the fiscal stability, price stabilization, and adjustment of supply and demand in order to efficiently manage the national economy, and if necessary for raising funds for support business following fluctuation of oil prices: Provided, That where the tax rates are adjusted pursuant to the main clause for taxable goods prescribed by Presidential Decree among those specified in paragraph (2) 1 through 3, the limit of the difference between the tax amount calculated according to the tax rate specified in paragraph (2) and the adjusted tax amount calculated according to the adjusted tax rate may be prescribed by Presidential Decree, not to exceed one million won for each taxable good. <Amended on Jan. 1, 2010; Dec. 22, 2020; Aug. 12, 2022>

(8) Every decision on taxable goods shall be based on the form, purpose of use, characteristics, and other special qualities of the goods, irrespective of however named. <Amended on Jan. 1, 2010>

(9) Where the same taxable good falls into at least two items of goods specified in paragraph (2), it shall be treated as the item of goods suitable for the characteristics of the taxable goods, on condition that where the characteristics are unclear, it be treated as the item of goods used for the primary purpose of use of the taxable goods, and where the primary purpose of use is unclear, it be treated as the item of goods subject to a higher tax rate. <Amended on Jan. 1, 2010>

(10) Where taxable goods are taken out in a dissembled or unassembled state, they shall be treated as finished products. <Amended on Jan. 1, 2010>

(11) Even in cases of running a taxable entertainment place or taxable business place which falls under paragraph (4) or (5) without obtaining permission in accordance with the Food Sanitation Act, the Tourism Promotion Act or other statutes or regulations, such place shall be deemed a taxable entertainment place or taxable business place subject to taxation. <Amended on Jan. 1, 2010>

(12) Except as otherwise expressly provided for in paragraphs (8) through (11), matters necessary for determining taxable goods, taxable places, taxable entertainment places, taxable business places, and entertaining, eating and drinking shall be prescribed by Presidential Decree. <Amended on Jan. 1, 2010; Dec. 27, 2010>

[Title Amended on Jan. 1, 2010]

Article 1-2(Provisional Tax Rate) #

(1) The taxable goods that are leading in technological development or environment-friendly and prescribed by Presidential Decree shall be subject to the following tax rates:

1. For four years from the date prescribed by Presidential Decree: 10/100 of the tax rates specified in Article 1 (2) (hereafter referred to as "basic tax rate" in this Article);

2. For one year after the termination of the period specified in subparagraph 1: 40/100 of the basic tax rate;

3. For one year after the termination of the period specified in subparagraph 2: 70/100 of the basic tax rate.

(2) The period of application of the tax rates in paragraph (1) may be shortened or suspended or the tax rates may be raised within the scope of the basic tax rate, as prescribed by Presidential Decree.

(3) The tax rates referred to in paragraphs (1) and (2) shall apply in preference to the basic tax rate, and the tax rates prescribed in Article 1 (7).

[This Article Wholly Amended on Jan. 1, 2010]

Article 2(Non-taxation) #

No individual consumption tax shall be levied on any of the following goods: <Amended on May 25, 2010>

1. Goods manufactured to be used only by manufacturers (excluding corporations) and their families;

2. Goods subject to simplified tax rates in accordance with the Customs Act;

3. Goods collected at manufacturing places in accordance with the Livestock Products Sanitary Control Act, Pharmaceutical Affairs Act or Food Sanitation Act;

4. Goods containing not less than one percent alcoholic content, on which the liquor tax is levied in accordance with the Liquor Tax Act.

[This Article Wholly Amended on Jan. 1, 2010]

Article 3(Taxpayer) #

Any of the following persons shall be liable to pay the individual consumption tax in accordance with this Act: <Amended on Dec. 26, 2008; Jan. 1, 2010>

1. Deleted; <Dec. 15, 2015>

2. A person manufacturing taxable goods to take them out;

3. A person who is liable to pay customs duties in accordance with the Customs Act and takes taxable goods out of the bonded areas referred to in the Customs Act (hereinafter referred to as "bonded area");

4. With respect to goods on which customs duties are collected except for cases falling under subparagraph 3, a person liable to pay the customs duties;

5. An operator of the taxable place referred to in Article 1 (3);

6. An operator of the taxable entertainment place referred to in Article 1 (4);

7. An operator of the taxable business place referred to in Article 1 (5).

[Title Amended on Jan. 1, 2010]

Article 4(Timing for Taxation) #

The individual consumption tax shall be imposed in accordance with the relevant statutes or regulations as at the time of taking-out for delivery, import declaration, admission, provision of entertainment or food, or business activities as follows: Provided, That the Customs Act shall apply to the cases falling under subparagraph 4 of Article 3: <Amended on Dec. 15, 2015>

1. Individual consumption tax on goods: When taxable goods are taken out for delivery from the manufacturing place or when an import declaration of taxable goods is filed;

2. Individual consumption tax on admission: When entering taxable places;

3. Individual consumption tax on the acts of entertaining, eating and drinking: When doing the acts of entertaining, eating and drinking;

4. Individual consumption tax on the act of business: When conducting businesses at taxable business places.

[This Article Wholly Amended on Jan. 1, 2010]

Article 5(Cases Construed as Manufacturing) #

Any of the following cases shall be considered to manufacture the concerned goods: <Amended on Jun. 9, 2020>

1. Conducting any of the following acts for the purpose of selling at a place which is not a manufacturing place:

(a) Charging containers with the goods prescribed by Presidential Decree or decorating such goods;

(b) Undergoing processes to elevate the value of taxable goods, such as decoration, assembly and addition;

(c) Mixing the goods referred to in Article 1 (2) 4 (e) and (f) (limited to cases where the mixture is butane from among the petroleum gases specified in Article 1 (2) 4 (f));

2. Replacing or supplementing most materials of used goods to upgrade the value of the used goods to the level equivalent to that of a new product, or processing or remodeling used goods into a new product by using the whole or part of the parts of the used goods.

[This Article Wholly Amended on Jan. 1, 2010]

Article 6(Cases Deemed as Shipping-Out) #

(1) Taxable goods which fall under any of the following subparagraphs shall be deemed as being shipped out of the manufacturing place: <Amended on Jan. 1, 2010; Dec. 31, 2022>

1. Where taxable goods are used or consumed at a manufacturing place: Provided, That the same shall not apply to any cases that correspond to the grounds prescribed by Presidential Decree;

2. Where taxable goods which have been in the manufacturing place are converted into money through public sale, auction, or bankruptcy proceedings;

3. Where taxable goods remain at the manufacturing place in the event that the manufacturing of the taxable goods is effectively discontinued: Provided, That the same shall not apply where the approval of the head of a competent tax office is obtained, falling into the grounds prescribed by Presidential Decree.

(2) Where an operator of a taxable entertainment place has the acts of entertaining, eating, and drinking conducted at a place other than the taxable entertainment place, the acts of entertaining, eating, and drinking shall be considered to be conducted in the taxable entertainment place. <Amended on Jan. 1, 2010>

(3) Where an operator of a taxable business place conducts business at a place other than the taxable business place, the act of business shall be considered to be conducted at the taxable business place. <Amended on Jan. 1, 2010>

[Title Amended on Dec. 31, 2022]

Article 7(Cases Considered to Have Received Full Charge for Entertainment and Food) #

Where an operator of a taxable entertainment place has the acts of entertaining, eating and drinking conducted without receiving the whole or part of a charge for entertainment and food, he or she shall be considered to have received the charge in full.

[This Article Wholly Amended on Jan. 1, 2010]

Article 8(Tax Base) #

(1) The tax base of the individual consumption tax shall be as mentioned in the following subparagraphs: Provided, That the tax bases of the taxable goods referred to in Article 1 (2) 2 shall be the portions of the prices in subparagraphs 1 through 4, which exceed standard prices: <Amended on Dec, 26, 2008; Jan. 1, 2010; Dec. 31, 2011>

1. Deleted; <Dec. 15, 2015>

2. Goods manufactured and taken out by the taxpayer prescribed in subparagraph 2 of Article 3: The price or quantity at the time when the goods are taken out of a manufacturing place: Provided, That in cases of the gasoline and substitute oil similar thereto referred to in Article 1 (2) 4 (a), the quantity obtained by deducting from the quantity at the time when they are taken out of a manufacturing place the quantity calculated by multiplying the quantity at the time when they are taken out of the manufacturing place by the rate which is prescribed by Presidential Decree in consideration of the degree of natural decrease, such as evaporation in the process of transporting and storing the goods until the goods are sold to consumers after leaving the manufacturing place;

3. Goods taken out of bonded areas by the taxpayer referred to in subparagraph 3 of Article 3: The quantity or the sum of the taxable prices for customs duties and customs duties at the time when importation is declared: Provided, That the proviso to subparagraph 2 shall apply mutatis mutandis to the cases of the gasoline and substitute oil similar thereto stipulated in Article 1 (2) 4 (a);

4. Goods prescribed in subparagraph 4 of Article 3: The quantity or the sum of the taxable prices for customs duties and customs duties at the time when the concerned customs duties are collected;

5. Admission to taxable places: The number of visitors at the time of entering;

6. Acts of entertaining, eating and drinking at taxable entertainment places: The charge at the time of entertaining, eating and drinking: Provided, That in cases of the taxable entertainment places that install and use a cash register pursuant to Article 23-3, the amount of cash income may become a tax base, as prescribed by Presidential Decree;

7. Act of doing business at a taxable business place: Turnover.

(2) The prices or charges under paragraph (1) 2 through 6 shall not include the individual consumption tax or value-added tax on the relevant goods, entertainment, or food, whereas the prices under paragraph (1) 2 through 4 shall include prices for the containers thereof and packing charges (excluding those prescribed by Presidential Decree). <Amended on Jan. 1, 2010; Dec. 15, 2015>

Article 9(Filing Tax Base Returns) #

(1) Any person liable to pay individual consumption tax, under subparagraphs 2 of Article 3, and Article 6 (1) 1, shall file a tax base return (in cases where the person files a tax return via the national tax information and communications network, including data input into such network; hereinafter the same shall apply) stating the quantity, price, tax base, calculated tax amount, unpaid tax amount, amount of tax exemptions, amount of tax deductions, tax refunds, tax amount to be paid, etc. of each item of goods shipped out of the manufacturing place each quarter (referring to each month for the goods falling under Article 1 (2) 4 or 6) with the head of the tax office having jurisdiction over the manufacturing place by the 25th day (or the last day of the month following the month in which the goods falling under Article 1 (2) 4 or 6 are taken out) of the month immediately following the quarter in which the date of shipping-out falls. <Amended on Jan. 1, 2010; Dec. 23, 2014; Dec. 15, 2015; Dec. 31, 2022>

(2) Where the taxpayer referred to in subparagraph 3 of Article 3 files an import declaration with the head of the tax office having jurisdiction over the bonded area, the tax return referred to in paragraph (1) shall be deemed filed. <Amended on Jan. 1, 2010>

(3) The Customs Act shall apply mutatis mutandis to the taxpayer referred to in subparagraph 4 of Article 3. <Amended on Jan. 1, 2010>

(4) The taxpayer referred to in subparagraph 5 of Article 3 shall file a tax base return stating the number of visitors and admission income of each quarter by the kinds and tax rates of the taxable place, with the head of the tax office having jurisdiction over the taxable place by the 25th of the month following the quarter in which the date of admission falls. <Amended on Jan. 1, 2010>

(5) The taxpayer referred to in subparagraph 6 of Article 3 shall file a tax base return stating the number of persons, charges for entertainment and food, calculated tax amount, amount of tax exemptions, amount of tax deductions, tax amount to be paid, etc. of each month by the kind of the taxable entertainment place, with the head of the tax office having jurisdiction of the taxable entertainment place by the 25th of the month following the month in which the date of providing entertaining, eating and drinking falls. <Amended on Jan. 1, 2010; Dec. 27, 2010>

(6) The taxpayer referred to in subparagraph 7 of Article 3 shall file a tax base return stating the total amount of money received from the customers of the taxable business place, total amount of money paid to customers, turnover, total tax amount, etc. of each year, and financial statements of the previous year accompanied by the audit report prepared by a certified public accountant, with the head of the tax office having jurisdiction over the taxable business place by the last day of March of the year following the year in which the date the business was conducted falls. <Amended on Jan. 1, 2010; Jun. 9, 2020>

Article 10(Payment) #

(1) Any person liable to pay the individual consumption tax under any of subparagraphs 2 and 5 through 7 of Article 3, and subparagraph 1 of paragraph (1) Article 6, shall pay the individual consumption tax of each quarter (each month in cases of the goods falling under Article 1 (2) 4 or 6 and taxable places of entertainment referred to in Article 1 (4), and each year in cases of the taxable places of business referred to in Article 1 (5)) to the head of the competent tax office by the relevant filing deadline of tax base returns prescribed by Article 9 (1), and (4) through (6). <Amended on Dec. 27, 2010; Dec. 23, 2014; Dec. 15, 2015>

(2) Any of the following persons shall pay individual consumption tax to the head of the competent tax office by the relevant deadline for filing tax base return under Article 9 (7): <Amended on Dec. 31, 2011; Dec. 31, 2022>

1. A taxpayer referred to in Article 6 (1) 2 or 3;

2. A person who actually ceases the operation of his or her manufacturing place, taxable place, taxable entertainment place, or taxable business place.

(3) The Customs Act shall apply to payment of the individual consumption tax by taxpayers referred to in subparagraphs 3 and 4 of Article 3.

(4) Any person that intends to take taxable goods out of a bonded area in accordance with the Customs Act before an import declaration is accepted shall provide a seizure equivalent to the amount of the relevant individual consumption tax, as prescribed by the Customs Act.

(5) If deemed necessary for securing tax payment, the head of the competent tax office may require the operators of taxable entertainment places or taxable business places referred to in subparagraph 6 or 7 of Article 3 to provide a seizure equivalent to the amount of the relevant individual consumption tax, as prescribed by Presidential Decree.

[This Article Wholly Amended on Jan. 1, 2010]

Article 10-2(Blanket Payment) #

(1) Any person that pays or is refunded the individual consumption tax pursuant to subparagraph 1 (c) of Article 5, Article 14 (4) and Article 20-2 (1) as the taxpayer referred to in subparagraph 2 of Article 3 may pay or be refunded the individual tax amount in a lump at a manufacturing place where the concerned goods are manufactured and taken out, under the conditions prescribed by Presidential Decree.

(2) Any person that intends to pay the individual consumption tax in a limp at a manufacturing place where the concerned goods are manufactured and taken out pursuant to paragraph (1) shall make an application to the head of the competent tax office to obtain approval therefor, as prescribed by Presidential Decree.

[This Article Wholly Amended on Jan. 1, 2010]

Article 10-3(Reports and Payments by Unit of Business Operator) #

Notwithstanding Article 9 (1), paragraphs (4) through (7) of that Article and Article 10 (1) and (2), any business operator who files a report as a unit of business operator pursuant to Article 21 (2) (hereafter referred to as "business operator taxable by the unit of business operator" in Article 21 (3)) may file a report and make payment collectively at the headquarters or principal office of the business operator. In such cases, the headquarters or principal office of the business operator shall, when applying this Act in connection with making reports and payments, be construed as each manufacturing place, taxable place, taxable entertainment place, or taxable business place. <Amended on Dec. 31, 2022>

[This Article Newly Inserted on Dec. 27, 2010]

Article 10-4(Special Cases concerning Reporting on Goods Sold or Taken out of Places of Bringing-in after Being Taken out without Tax Payment) #

Where a person has taken out goods without paying the individual consumption tax under Article 14 (1) or 20-3 (1) (hereafter referred to as "person who takes out goods without paying the tax" in this Article) and a person who has brought in the goods which were taken out is the identical business operator, the person who takes out goods without paying the tax may report or pay the individual consumption tax for the relevant goods to the head of the competent tax office or customs office when selling or taking out the goods in the place of bringing-in, as prescribed by Presidential Decree, notwithstanding Article 14 (4). <Amended on Dec. 23, 2014>

[This Article Newly Inserted on Dec. 31, 2011]

Article 10-5(Special Provisions concerning Mixing of Different Kinds of Oil in Oil Reservoirs) #

When a taxpayer referred to in subparagraph 2 or 3 of Article 3 (hereafter referred to as "manufacturer, etc." in this Article) takes any kind of oil referred to in Article 1 (2) 4 (a) through (c) out of its manufacturing place or a bonded area through an oil pipeline under the Oil Pipeline Safety Control Act or by a means of transport, such as a ship or tank lorry, and take them again out of the oil reservoir owned or leased by the manufacturer, etc., if a cause prescribed by Presidential Decree, such as mixing of different kinds of oil (hereafter referred to as "mixed oil, etc." in this Article), occurs in the oil reservoir, this Act shall apply as follows: <Amended on Jan. 1, 2013>

1. Taxpayer: Manufacturers, etc. notwithstanding subparagraph 2 of Article 3;

2. Timing of taxation: The time of occurrence of mixing of oil, etc., notwithstanding subparagraph 1 of Article 4;

3. Tax base: Quantities at the time of occurrence of mixing of oil, etc., notwithstanding Article 8 (1) 2.

[This Article Newly Inserted on Dec. 31, 2011]

Article 11(Decision, Decision of Correction, and Re-Correction) #

(1) Where the written reports referred to in Article 9 fail to be submitted or any error or omission is found in reported matters, the head of each competent tax office, local tax service, or customs office shall decide or decide the correction of tax bases and tax amounts concerned. <Amended on Dec. 31, 2011>

(2) Determination or decision of correction under paragraph (1) shall be based on an account book or other evidential matters: Provided, That such decision may be made by estimation in accordance with Presidential Decree where there is any reason falling under any of the following subparagraphs: <Amended on Dec. 31, 2011>

1. Where an account book or other evidential matters necessary for calculating the tax base do not exist, or any important part thereof is not prepared;

2. Where the details of an account book or other evidential matters are obviously false, considering the size of facilities, the number of employees, the market values of raw materials, merchandise, products, various types of charges, etc.;

3. Where the details of an account book or other evidential matters are obviously false, considering the usage amount of raw material or power or other operating conditions.

(3) The chief of the competent district tax office, the head of the competent regional tax office, or the head of the competent customs office shall correct any error or omission that is found in the tax base and tax amount decided or decided to be corrected under paragraphs (1) and (2). <Newly Inserted on Dec. 31, 2011>

[This Article Wholly Amended on Jan. 1, 2010]

[Title Amended on Dec. 31, 2011]

Article 12(Occasional Imposition) #

Notwithstanding the provisions of Article 9, where a taxpayer is deemed likely to evade the individual consumption tax or is in a state of suspension or closure of business due to depression in business and other causes, the tax base and tax amount thereof may be determined occasionally. In such cases, the provisions of Article 11 (2) shall be applicable mutatis mutandis thereto.

[This Article Wholly Amended on Jan. 1, 2010]

Article 13 #

Deleted. <Dec. 30, 2006>

Article 14(Taking-out without Paying Tax) #

(1) No individual consumption tax shall be levied on the following goods, as prescribed by Presidential Decree:

1. Where the goods to be exported are brought to other place;

2. Where goods are taken out of a manufacturing place to be displayed in the exhibitions, shows, or fairs to be held in Korea or other equivalent places (hereinafter referred to as "exhibition, etc."), where the goods which were displayed in exhibitions, etc. held inside and outside Korea are returned to manufacturing places or taken out of bonded areas, and where duty-free goods are imported on condition that they be exhibited in international exhibitions, etc. or imported free of charge to be exhibited in exhibitions, etc. to be held in Korea;

3. Where the goods manufactured with supplied raw materials or only on commission basis are brought out of a manufacturing place to be delivered to the warehouse of a truster;

4. Where goods are taken out of a manufacturing place to undergo a specification inspection at a place other than the manufacturing place or returned to the manufacturing place;

5. Where the good which are taken in under subparagraphs 1 and 3, Article 15 (1), 16 (1), 17 (1), 18 (1), or 19 are returned to a manufacturing place by reason of poor quality or others;

6. Goods deemed not to hinder securing the payment of the individual consumption tax or regulating other matters and prescribed by Presidential Decree.

(2) With respect to goods referred to in paragraph (1) over which the fact that they were brought into a place of bringing-in or provided for specified purpose of use was not proven as prescribed by Presidential Decree, individual consumption tax shall be collected from the persons who take out goods or declare the importation of goods. <Amended on Dec. 31, 2022>

(3) Where the goods referred to in paragraph (1) is lost due to a disaster or other unavoidable causes before they are brought to a place of bringing-in, no individual consumption tax shall be collected, as prescribed by Presidential Decree.

(4) In cases falling under paragraph (1), the place to which the relevant goods are brought in shall be construed as the manufacturing place, and the person who brings in the relevant goods shall be construed as as the manufacturer under Article 3. <Amended on Dec. 31, 2022>

(5) Any person who brings taxable goods to a place of bringing-in under paragraph (1) shall report the relevant fact to the head of the competent tax office or customs office by the 15th day of the month following the quarter in which the date of bringing-in falls (in cases of the goods falling under Article 1 (2) 4 or 6, by the 15th day of the month following the month in which the date of bringing-in falls). <Amended on Dec. 23, 2014>

Article 15(Tax Exemption for Exportation and Military Goods) #

(1) Any of the following goods shall be exempted from the individual consumption tax, as prescribed by Presidential Decree:

1. Articles to be exported;

2. Articles to be supplied to foreign armies stationed in Korea (hereinafter referred to as "foreign armies stationed in Korea").

(2) With respect to goods referred to in paragraph (1) the provision of which for the specified purpose of use is not proven as prescribed by Presidential Decree, the individual consumption tax shall be collected from persons who take out goods or declare the importation of goods: Provided, That where the changed purpose of use of the relevant goods is confirmed, individual consumption tax shall be collected immediately as prescribed by Presidential Decree. <Amended on Dec. 31, 2022>

(3) With respect to those who bring in goods exempted from the individual consumption tax pursuant to paragraph (1) 1, the individual consumption tax shall be collected from the persons of bringing-in when a specific cause prescribed by Presidential Decree occurs.

(4) Where goods exempted from the individual consumption tax pursuant to paragraph (1) 2 are transferred to or possessed by other person within five years from the date on which approval for exemption is obtained as prescribed by Presidential Decree, the individual consumption tax shall be collected, considering that the transferee or possessor took them out or made a declaration of importation.

(5) The provisions of Article 14 (3) shall apply mutatis mutandis to the goods taken out with an exemption from the individual consumption tax pursuant to paragraph (1).

[This Article Wholly Amended on Jan. 1, 2010]

Article 16(Diplomatic Exemption) #

(1) Any of the following goods shall be exempted from the individual consumption tax, as prescribed by Presidential Decree: <Amended on Dec. 27, 2010>

1. Goods imported or purchased at a manufacturing place by diplomatic missions in the Republic of Korea, and equivalent institutions prescribed by Presidential Decree (hereinafter referred to as "diplomatic mission, etc. to Korea") for official use;

2. Goods imported by diplomats, and equivalent persons prescribed by Presidential Decree (hereinafter referred to as "diplomat, etc. to Korea"), and their families for their own use;

3. Petroleum used for the motor vehicles used by diplomatic missions, etc. to Korea, and diplomats, etc. to Korea.

(2) Where goods exempt from the individual consumption tax under paragraph (1) are transferred to, or held by a third person within three years from the date on which approval for exemption is granted, as prescribed by Presidential Decree, the individual consumption tax shall be collected, deeming that the transferee or holder took them out or filed an import declaration: Provided, That no individual consumption tax shall be levied on motor vehicles, among the goods exempt from the individual consumption tax under paragraph (1), even if such motor vehicles are transferred to, or held by a third person within three years from the date on which approval for exemption is granted, in extenuating circumstances prescribed by Presidential Decree, including transfer of a foreign diplomat in Korea. <Amended on Dec. 27, 2010; Dec. 23, 2014>

(3) Article 14 (3) shall apply mutatis mutandis to the goods taken out with an exemption from the individual consumption tax under paragraph (1).

(4) The Minister of Foreign Affairs shall determine the maximum annual quantity of tax-free petroleum referred to in paragraph (1) 3 by December 31 each year in consultation with the Minister of Economy and Finance. <Newly Inserted on Dec. 27, 2010; Mar. 23, 2013>

(5) Paragraphs (1) and (2) shall apply only where the relevant country exempts diplomatic missions, diplomats, etc. of the Republic of Korea from its national tax equivalent or similar to the individual consumption tax of the Republic of Korea (the proviso to paragraph (2) shall apply only where the relevant country equally exempts diplomatic missions, diplomats, etc. of the Republic of Korea from such tax) and where the relevant country does not have any tax equivalent or similar to the individual consumption tax of the Republic of Korea. <Newly Inserted on Dec. 27, 2010; Dec. 23, 2014>

Article 17(Tax Exemption for Foreigner-Only Selling Places) #

(1) With respect to goods that are taken out of the manufacturing place to be brought into a foreigner-only selling place designated by the head of the competent tax office for the purpose of selling them there to non-residents, or diplomats, etc. to Korea having their addresses or abodes in Korea, the individual consumption tax shall be exempted, as prescribed by Presidential Decree. <Amended on Jan. 1, 2010; Dec. 27, 2010; Dec. 31, 2022>

(2) The provisions of Article 14 (2) through (5) shall apply mutatis mutandis to the verification of bringing-in of, loss of, liability for tax payment of and report of the fact of bringing-in of the goods taken out with an exemption from the individual consumption tax under paragraph (1). <Amended on Jan. 1, 2010>

(3) The operator of the foreigner-only selling place in paragraph (1) shall submit a tax-free sales report to the head of the competent tax office by applying the provisions of Article 9 (1) mutatis mutandis to the tax-free goods sold quarterly (monthly for the goods falling under Article 1 (2) 4). <Amended on Jan. 1, 2010>

(4) Deleted. <Dec. 3, 1999>

(5) Where a person who purchased individual consumption tax-exempt goods at a foreigner-only selling place does not possess the goods at the time when he or she departs from Korea, the individual consumption tax shall be collected from the purchaser. <Amended on Jan. 1, 2010>

(6) Where the goods which are brought in with an exemption from the individual consumption tax pursuant to paragraph (1) are possessed by a person who is not allowed to purchase them at the concerned selling place, the individual consumption tax shall be collected from the possessor: Provided, That the same shall not apply where the fact is confirmed that the individual consumption tax was collected from the concerned operator or purchaser. <Amended on Jan. 1, 2010>

(7) Matters concerning the designation of foreigner-only selling places and the cancellation thereof, non-resident, tax-free goods, the kind of and procedures for the sale of goods on which a tax is collected when the purchaser thereof fails to possess them at the time of departing from Korea, and reports shall be prescribed by Presidential Decree. <Amended on Jan. 1, 2010>

[Title Amended on Jan. 1, 2010]

Article 18(Conditional Tax Exemptions) #

(1) Any of the following goods shall be exempted from individual consumption tax, as prescribed by Presidential Decree: Provided, That the individual consumption tax levied on goods referred to in subparagraph 3 (a) (referring to an amount computed by subtracting the costs for installation of special equipment for persons with disabilities from the tax base) shall be exempted by up to five million won, and the individual consumption tax levied on goods referred to in subparagraph 3 (f) shall be exempted by up to three million won: <Amended on Mar. 9, 2011; Jun. 7, 2011; Dec. 31, 2011; Jan. 23, 2013; Jan. 1, 2014; Mar. 22, 2016; Dec. 31, 2022>

1. Goods supplied to produce, use, and develop nuclear reactors, nuclear power or isotope, or goods used as raw materials to manufacture such goods;

2. Jewelry for physical and chemical experiments and research, industries and production of phonograph needles;

3. Any of the following passenger vehicles:

(a) Passenger vehicles purchased by persons with disabilities prescribed by Presidential Decree (limited to one vehicle per disabled person);

(b) Passenger vehicles exclusively used for the transportation of patients;

(d) Passenger vehicles used for car rental business defined under subparagraph 4 of Article 2 of the Passenger Transport Service Act: Provided, That those rented to the same person or corporation for more than six months in total within three years from the date of purchase shall be excluded;

(e) Passenger vehicles imported to be used for testing and studying for the development of new products or new technologies by the research institutes attached to companies and divisions in exclusive charge of research and development of companies recognized under Article 14-2 (1) of the Basic Research Promotion and Technology Development Support Act;

(f) Passenger vehicles purchased by a person who raises at least three children under the age of 18 (counted based on the family relations register, including adopted children and children of a spouse, but excluding adopted children from the number of children of biological parents).

4. Goods donated from foreign countries for charity or relief to charities, or relief institutions and organizations;

Article 19(Unconditional Tax Exemptions) #

Any of the following goods shall be exempted from the individual consumption tax, as prescribed by Presidential Decree: <Amended on Dec. 23, 2014; Jun. 9, 2020>

1. Goods donated to charities, or relief institutions or organizations in foreign countries;

2. Marks of honor and badges awarded by foreign countries or equivalent commendation articles and medals;

3. Goods for official use sent from warships sailing abroad or missions abroad;

4. Dismantled materials and equipment that come from the dismantlement of Korean ships or other transportation means in distress;

5. Re-imported containers of export goods;

6. Where a foreign trading vessel or deep-sea fishing vessel becomes a coaster under the approval of the head of a customs office, duty-free fuel or other consumption goods that are loaded in the vessel and deemed to be used in the vessel;

7. Goods donated to the State or local governments;

8. Aid goods imported as military aid or military goods manufactured by using such goods as raw materials: Provided, That where goods other than the aid goods are mixed as raw materials, the raw materials shall not be exempted from taxation;

9. Goods imported by being carried by persons entering into Korea for purposes other than immigration or imported separately by such persons, which are exempt from duties, being recognized to be used directly by such persons;

10. Duty-free relocation goods imported by being carried by persons entering into Korea for the purpose of immigration or imported separately by such persons;

11. Petty duty-free goods given to a resident and deemed to be used by the resident;

12. Duty-free commercial samples or advertising goods imported from foreign countries;

13. Goods brought out of Korea to be exhibited in exhibitions, etc. held in foreign countries;

14. Goods re-imported and brought out of bonded areas, which are verified by the head of the competent tax office that neither refund nor deduction under this Act is made to them after they are exported with the imposition of the individual consumption tax;

15. Where homemade and individual consumption tax-exempt goods which were brought out of Korea become taxable goods through re-importation within six months after the date of acceptance of declaration of exportation, goods re-imported and brought out of bonded areas, for which the head of the competent tax office verifies the fact that no exemption, refund or deduction is made under this Act in connection with the raw materials used for the manufacturing and processing of the goods;

Article 19-2(Tax Exemption for Admission) #

The act of admission falling under any of the following subparagraphs shall be exempted from the individual consumption tax, as prescribed by Presidential Decree: <Amended on Mar. 27, 2015; Dec. 8, 2020>

1. Where an athlete participating in a competition held by the Korean Sport and Olympic Committee under the National Sports Promotion Act and the organizations affiliated thereto, or organizations prescribed by Presidential Decree, uses or enters into sports facilities during the period of competition;

2. Where a golf player prescribed by Presidential Decree enters into a golf course;

3. Where a foreigner or Korean national residing overseas prescribed by Presidential Decree, enters a casino licensed pursuant to Article 11 of the Special Act on the Assistance to the Development of Abandoned Mine Areas.

[This Article Wholly Amended on Jan. 1, 2010]

Article 19-3(Tax Exemption for Acts of Entertaining, Eating and Drinking) #

With respect to the entertainment and food that are provided to foreign military personnel at prices in foreign currencies by those who run taxable entertainment places in the areas in which the UN forces to Korea or U.S forces to Korea are stationed and are designated by the heads of the competent tax offices, the individual consumption tax shall be exempted.

[This Article Wholly Amended on Dec. 27, 2010]

Article 20(Deduction from, and Refund of, Tax Amount) #

(1) Where goods the individual consumption tax on which was paid or payable or the raw materials thereof fall under any of the following, the relevant tax amount shall be deducted from the tax amount payable or collectible, as prescribed by Presidential Decree: <Amended on Dec. 21, 2021>

1. Where the relevant tax amount is paid or collected for taxable goods which are brought from their manufacturing places or bonded areas (including where taxable goods are brought from places other than manufacturing places or bonded areas due to any unavoidable reason prescribed by Presidential Decree, such as where required by other statutes or regulations) and used directly for the manufacturing or processing of other taxable goods or for conducting acts under any of the items referred to in subparagraph 1 of Article 5;

2. Deleted; <Dec. 15, 2015>

3. Where the relevant tax amount is paid or collected for taking out goods which are brought taxable goods from manufacturing places or bonded areas and processed or assembled pursuant to Article 1 (10).

(2) Where goods for which individual consumption tax was paid or payable or the raw materials thereof falls under any of the following subparagraphs, the tax amount that has been already paid shall be refunded, as prescribed by Presidential Decree; in such cases, if any tax amount is payable or collectible, such amount shall be deducted therefrom: <Amended on Dec. 31, 2022>

1. Where any taxable articles or any articles manufactured or processed with such taxable articles are exported or supplied to foreign armies stationed in Korea;

2. Goods exempted from the individual consumption tax and goods used as raw materials for such goods;

3. Where taxable goods (excluding used goods but including used goods returned for exchange or refunding in accordance with the Framework Act on Consumers) taken out of a manufacturing place are returned to the same manufacturing place (including another manufacturing place of the same company in cases of the goods referred to in each item of Article 1 (2) 4) or depositories by reason of bad quality, deterioration, natural disaster and other causes prescribed by Presidential Decree and the fact that they are returned is verified, as prescribed by Presidential Decree through reporting to the head of the competent tax office by the 25th (in cases of the goods falling under Article 1 (2) 4, the last day of the month following the month in which the date of returning falls) of the month following the quarter in which the date of returning falls. In such cases, when the fact that they are returned to depositories is verified, they shall be deemed returned to the same manufacturing place.

Article 20(Deduction from, and Refund of, Tax Amount) #

1. Where the relevant tax amount is paid or collected for taxable goods which are brought from their manufacturing places or bonded areas (including where taxable goods are brought from places other than manufacturing places or bonded area due to any unavoidable reason prescribed by Presidential Decree, such as where required by other statutes or regulations) and used directly for the manufacturing or processing of other taxable goods or for conducting acts under any of the items referred to in subparagraph 1 of Article 5;

2. Deleted; <Dec. 15, 2015>

(2) Where any of the following applies to the goods, the individual consumption tax on which was paid or payable or the raw materials thereof, the tax amount that has been already paid shall be refunded, as prescribed by Presidential Decree. In such cases, if any tax amount is payable or collectible, it shall be deducted therefrom: <Amended on Dec. 31, 2022>

1. Where any taxable articles or any articles manufactured or processed with such taxable articles are exported or supplied to foreign armies stationed in Korea;

2. Goods exempted from the individual consumption tax and goods used as raw materials for such goods;

Article 20-2(Special Cases on Refund of Individual Consumption Tax for Butane for Household Use) #

(1) With respect to liquefied petroleum gas charging business operators selling the goods referred to in Article 1 (2) 4 (f) (hereafter referred to as "butane for household use" in this Article) which are used for cooking, heating and other purposes prescribed by Presidential Decree to liquefied petroleum gas sellers and other business operators prescribed by Presidential Decree and with respect to the taxpayers specified in Article 3 who manufacture or import butane for household use, the individual consumption tax amount calculated according to the following formula (hereafter referred to as "tax amount subject to refunding" in this Article) shall be refunded or deducted from the tax amount to be paid or collected.

(2) Deleted. <Dec. 22, 2020>

(3) Any person that intends to receive a refund or deduction pursuant to paragraph (1) shall submit a refund application in which quantities of butane for household use sold each month, tax amount subject to refunding, etc. are entered to the head of the tax office or customs office having jurisdiction over the concerned business operator by the end of the following month: <Amended on Dec. 31, 2011; Dec. 22, 2020>

1. Deleted; <Dec. 22, 2020>

2. Deleted. <Dec. 22, 2020>

(4) In any of the following subparagraphs, the head of each competent tax office or customs office shall collect an individual consumption tax in an amount equivalent to the sum of an amount prescribed in the subparagraph concerned and an additional tax equivalent to 40/100 (in cases of arithmetic error, 10/100) of such amount: <Amended on Dec. 31, 2011; Dec. 22, 2020>

1. Where a person who has received a tax refund or deduction under paragraph (1) has received an excessive refund or deduction on grounds prescribed by Presidential Decree, such as issuance of falsified tax invoices: The tax amount refunded or deducted excessively;

2. Where a business operator supplied with relevant goods under paragraph (1) uses the goods for purposes other than the purposes prescribed in the said paragraph: The tax amount refunded in relation to quantities used for other purposes.

(5) Article 112 (2) and (4) of the National Tax Collection Act shall apply mutatis mutandis to those falling under paragraph (4), according to the criteria prescribed by Presidential Decree. <Amended on Dec. 22, 2020>

(6) In applying paragraphs (1) and (3) through (5), matters necessary for procedures for refunding and deduction, documents to be submitted, collection of tax amount, etc. shall be prescribed by Presidential Decree. <Amended on Dec. 22, 2020>

Article 20-3(Special Cases of Taking-out of Tobacco without Paying Tax and Tax Exemptions, Deductions, and Refunds) #

(1) Notwithstanding Article 14 (1), Article 53 of the Local Tax Act shall apply mutatis mutandis to the grounds for exempting the goods referred to in Article 1 (2) 6 (hereafter in this Article referred to as "tobacco") from the individual consumption tax, and the provisions, with the exception of subparagraphs, of Article 14 (1) and Article 14 (2) through (5) shall apply to procedures therefor, additional tax collection, etc.

(2) Notwithstanding Articles 15 (1), 16 (1), 18 (1), and 19, Article 54 of the Local Tax Act shall apply mutatis mutandis to the grounds for exempting tobacco from the individual consumption tax, and the following provisions shall apply to the procedure therefor, additional tax collection, etc.: Provided, That the individual consumption tax shall be collected from a person who disposes of tobacco, if the person takes out tobacco exempt from the individual consumption tax, and subsequently transfers, sells, consumes, or otherwise disposes of such tobacco instead of using it for the relevant purpose: <Amended on Dec. 20, 2016>

1. In case of export under Article 54 (1) 1 of the Local Tax Act (excluding sample tobacco used for export counseling): The provisions, with the exception of subparagraphs, of Article 15 (1) and Article 15 (2) through (5) shall apply;

2. Cases other than those provided for in subparagraph 1: The main clause, with the exception of the subparagraphs, of Article 18 (1), and Article 18 (2), (3), and (5) shall apply.

(3) Notwithstanding Article 20 (1) and (2), the grounds for refunding the individual consumption tax paid or for deducting individual consumption tax payable for tobacco are as follows, and the provisions, with the exception of subparagraphs, of Article 20 (1) and (2) and Article 20 (3) through (7) shall apply to the procedure therefor, additional tax collection, etc.: <Amended on Dec. 20, 2016>

1. Where tobacco taken out of a manufacturing place or bonded area is destroyed or damaged due to a natural disaster or any other unavoidable cause;

2. Where tobacco taken out of a manufacturing place or bonded area is brought in a manufacturing place or a place where tobacco is stored by an import distributer under subparagraph 6 of Article 47 of the Local Tax Act due to inferior packing or quality, slow sale, or any other unavoidable cause;

3. Tax amount which has been reported and paid is in excess;

4. Tobacco exempted from individual consumption tax under paragraph (2) and tobacco used as raw materials thereof.

Article 21(Report of Commencement and Closing of Business) #

(1) Any person that intends to manufacture taxable goods or any person that intends to run a taxable place, taxable entertainment place or taxable business places shall make a report to the head of the tax office having jurisdiction over the manufacturing place, taxable place, taxable entertainment place or taxable business place (hereafter referred to as "business place" in this Article), as prescribed by Presidential Decree. The same shall apply to cases of suspending or closing the businesses or changing reported matters. <Amended on Dec. 27, 2010; Dec. 31, 2022>

(2) Notwithstanding the provisions of paragraph (1), any business operator that has at least two business places may make a report to the head of the tax office having jurisdiction over the headquarters or principal office of the concerned business operator by the unit of business operator. <Newly Inserted on Dec. 27, 2010>

(3) Where a business operator who made a report on commencement of business pursuant to paragraph (1) intends to make a report by the unit of business operator pursuant to paragraph (2), he or she shall make a report 20 days prior to the commencement of the periods of taxation referred to in Article 9 (1) and paragraphs (4) through (6) of that Article in which he or she intends to be applied as a business operator taxable by the unit of business operator. <Newly Inserted on Dec. 27, 2010>

(4) Any person that takes over or succeeds to a taxable goods manufacturing business, or operation of a taxable place, taxable entertainment place or taxable business place shall report such fact to the head of the competent tax office immediately. In this case, the transferee shall report under joint signature with the transferor. <Amended on Dec. 27, 2010; Dec. 31, 2022>

(5) Where there is a merger between corporations, if the corporation in existence after the merger or corporation established through the merger (hereafter referred to as "merging corporation" in this paragraph) succeeds to the manufacturing business or operation of the taxable place, taxable entertainment place or taxable business place of the corporation that is extinguished (hereafter referred to as "merged corporation" in this paragraph), the merging corporation shall report such fact to the head of the competent tax office immediately. In this case, the merging corporation shall report under joint signature with the merged corporation. <Amended on Dec. 27, 2010; Dec. 31, 2022>

(6) Matters necessary for reports on the commencement or closure of business, etc. other than the matters prescribed in paragraphs (1) through (5) shall be prescribed by Presidential Decree. <Newly Inserted on Dec. 27, 2010>

Article 22(Cases not Considered as Closure of Business) #

Where succession to a manufacturing business, or to the operation of a taxable place, taxable entertainment place or taxable business place takes place by a universal title without the actual relocation of the manufacturing place, taxable place, taxable entertainment place or taxable business place, the concerned manufacturing business or operation shall not be considered to be closed in the application of this Act. <Amended on Dec. 31, 2022>

[This Article Wholly Amended on Jan. 1, 2010]

Article 23(Duty to Make Records in Account Books) #

(1) Every seller or manufacturer of taxable goods and the operator of each taxable place, taxable entertainment place, or taxable business place shall keep account books at each place and enter matters concerning the manufacturing, storage, sale, admission, acts of entertaining, eating and drinking or act of business concerned in the account books, as prescribed by Presidential Decree.

(2) The operator of each taxable entertainment place shall keep account books by separating taxable parts from tax-exempt parts.

(3) The operator referred to in Article 23-3 (1) shall keep the concerned audit tape, as prescribed by Presidential Decree. In such cases, he or she shall be considered to keep the account books under paragraph (1) and make records therein.

[This Article Wholly Amended on Jan. 1, 2010]

Article 23-2(Issue of Receipts) #

Where the operator of a taxable entertainment place accepts a charge for entertainment and food, he or she shall issue a receipt and keep a copy thereof, as prescribed by Presidential Decree.

[This Article Wholly Amended on Jan. 1, 2010]

Article 23-3(Installation of Cash Register) #

(1) The operators of taxable entertainment places prescribed by Presidential Decree shall install and use a cash register and may issue receipts thereby. In such cases, they shall be considered to issue the receipt under Article 23-2.

(2) Matters necessary for the installation and operation of a cash register shall be prescribed by Presidential Decree.

[This Article Wholly Amended on Jan. 1, 2010]

Article 24(Succession to Rights and Duties) #

(1) Where succession to a manufacturing business or to the operation of a taxable place, taxable entertainment place or taxable business place takes place by a universal title without the actual relocation of the manufacturing place, taxable place, taxable entertainment place, or taxable business place, the successor shall succeed to the following rights and duties that belonged to the predecessor: <Amended on Dec. 31, 2011; Dec. 31, 2022>

1. Duty to make a written report of tax base referred to in Article 9, and pay tax amounts referred to in Articles 10 and 10-2 and additional tax amounts prescribed in Articles 47-2 through 47-4 of the Framework Act on National Taxes;

2. Rights and duties concerning the deduction and refund under Article 20;

3. Duty to keep account books and make records therein pursuant to Article 23;

4. Rights and duties concerning the goods which are brought in with a tax unpaid or exempt in accordance with this Act and are under post-management.

(2) Except for cases falling under paragraph (1), the provisions of paragraph (1) shall also apply to those who bring in goods with a tax unpaid or exempt pursuant to Article 14 (1) or 18 (1).

[This Article Wholly Amended on Jan. 1, 2010]

Article 25(Matters Subject to Orders) #

(1) When deemed necessary for securing the payment of the individual consumption tax, the head of each tax office or customs office may order the sellers and manufacturers of taxable goods and the operators of taxable places, taxable entertainment places, and taxable business places to issue tax invoices, use admission tickets, issue receipts, install signboards, and conduct other matters necessary for regulating, as prescribed by Presidential Decree. <Amended on Jan. 1, 2010; Jun. 9, 2020>

(2) Deleted. <Oct. 16, 2004>

(3) The head of each competent local tax service or the head of each competent tax office may, when deemed necessary for securing the payment of the individual consumption tax, order any of the following persons to classify, load and keep concerned goods, submit tax data and other matters necessary for regulation: <Amended on Jan. 1, 2010>

1. A person who obtained the designation of sales business pursuant to Article 17 (7);

2. A person falling under Article 24 (2), who brought in goods with a tax unpaid or exempt;

3. A person who manufactures or processes the parts of taxable goods.

(4) Deleted. <Oct. 16, 2004>

[This Article Wholly Amended on Dec. 22, 1994]

[Title Amended on Jan. 1, 2010]

Article 26(Right to Ask Questions and to Inspect) #

(1) Every tax official may, when deemed necessary for conducting investigations on individual consumption tax, ask questions to the sellers or manufacturers of taxable goods and operators of taxable places, taxable entertainment places and taxable business places about the following matters or inspect concerned account books, documents or other things:

1. Taxable goods or products using the taxable goods, which are possessed by the sellers or manufacturers of the taxable goods;

2. Account books and documents concerning the manufacture, storage, or sales of taxable articles or any goods manufactured using such taxable articles;

3. Buildings, machines, instruments, materials, or other things that are necessary to manufacture, store or sell taxable goods or products using the taxable goods;

4. Account books, documents, and other things that concern admission to taxable places;

5. Account books, documents, and other things that concern the acts of entertaining, eating and drinking at taxable entertainment places;

6. Account books, documents, and other things that concern the act of business at taxable business places.

(2) Every tax official may ask questions about the origin or destination of the taxable goods that are being transported and products using the taxable goods. In such cases, the tax official may, when deemed necessary for regulating, have the transportation stopped or seal freights, or ships and vehicles or take other necessary measures.

(3) When a tax official asks questions or conducts an inspection pursuant to paragraph (1) or (2) or takes other necessary measures, he or she shall present a certificate showing his or her authority to related persons and shall not abuse his or her authority for any other purpose, etc. beyond the scope necessary to perform his or her duties. <Amended on Dec. 31, 2018>

[This Article Wholly Amended on Jan. 1, 2010]

Article 27(Request for Suspension of Business and Cancellation of Permission) #

(1) In cases falling under any of the following subparagraphs, the head of each competent tax office may request the suspension of business or cancellation of permission of the concerned taxable place, taxable entertainment place and taxable business place to the administrative agency authorized to grant permission for the business through the head of the local tax service, as prescribed by Presidential Decree:

1. Where a punishment or disposition is imposed in accordance with the Punishment of Tax Offenses Act or the Procedure for the Punishment of Tax Offenses Act in connection with the operation of the taxable place, taxable entertainment place and taxable business place;

2. Where the whole or part of the individual consumption tax for admission to taxable places, acts of entertaining, eating and drinking at taxable entertainment places and act of business at taxable business places fails to be reported or paid at least three times;

3. Where the operator of a taxable entertainment place and taxable business place fails to comply with the request for the provision of a seizure for tax payment referred to in Article 10 (5).

(2) Any administrative agency authorized to grant permission shall, when receiving the request in paragraph (1), suspend business or cancel permission according to the request unless there is a justifiable cause not to do so.

[This Article Wholly Amended on Jan. 1, 2010]

Article 28(Jurisdiction over Administrative Affairs concerning Individual Consumption Tax) #

Administrative affairs concerning the imposition and collection on the goods brought out of bonded areas or brought to bonded factories shall be handled by the heads of the customs offices having jurisdiction over the bonded areas.

[This Article Wholly Amended on Jan. 1, 2010]

[Moved from Article 29 <Jan. 1, 2010>]

Article 29(Administrative Fines) #

(1) The head of the competent tax office shall impose on, and collect from, a person who has sold petroleum taken out to use for any purpose other than the use in vessels navigating abroad or deep-sea fishing vessels among the petroleum exempted from individual consumption tax under Article 18 (1) 9 for use in vessels navigating abroad or deep-sea fishing vessels or a person who has acquired such petroleum knowing such fact, an administrative fine not exceeding three times the sale value or acquisition value thereof.

(2) The head of the competent tax office shall impose on, and collect from, a person who violates an order for securing the payment of tax issued under Article 25, an administrative fine not exceeding 20 million won.

(3) Standards for imposing administrative fines under paragraphs (1) and (2) shall be prescribed by Presidential Decree. <Newly Inserted on Dec. 21, 2021>

[This Article Newly Inserted on Dec. 31, 2018]