How much customs duty will be charged if I purchase a Rolex from overseas and bring it back?

Q

How much customs duty will be charged if I purchase a Rolex from overseas and bring it back?

A

Recently, as the number of overseas travelers has almost surpassed that of pre-coronavirus, many people are curious about tariffs when importing watches from overseas Rolex stores or second-hand stores. Unfortunately, watches worth more than 2 million won are classified as high-end luxury goods and are subject to individual consumption tax. And the individual consumption tax is accompanied by the education tax. Therefore, there are a total of four taxes levied when you purchase a watch.

Luxury watches among items subject to special consumption tax

However, this method is too complicated, so most people apply a simple ‘simplified tax rate’. Among these, we looked up the estimated tax amount using the Submariner Black Date as an example in the luxury watch/luxury bag category.

Simplified tax rate for traveler's belongings and luxury watches

The retail price of Submariner 126610LN, recently sold in the United States, is $10,250 excluding VAT.
Here, the tax base becomes the tax base by deducting the $800 per person tax exemption range. Calculating with this amount, assuming that it was brought in with a tax refund (based on the Korea Customs Service exchange rate as of October 17, 2023, 1$ = 1344.03 won)

$10,250 - $800 = $9,450 (tax base)
$9,450 × 1,344.03 won = 12,701,083.5 won
12,701,083.5 - 1,923,000 = 10,778,083.5 won
10,778,083.5 won × 0.45 = approximately 4,850,137 won

If you add the basic tax of 288,450 won, the total is 5,138,587 won. In the end, you will have to pay taxes exceeding 5 million won. I tried to calculate it complicatedly, but in fact, you can easily estimate the tax on the items you purchased by using the 'Traveler's Estimated Tax Amount Inquiry System' provided by the Korea Customs Service.

https://www.customs.go.kr/

If you voluntarily declare it in this way, you will receive a 30% reduction in customs duties (up to 200,000 won), and if you are caught for failing to report, an additional tax of 40% to 60% of the tax amount paid will be imposed, so you will spend almost twice the price of the watch. There is a risk that it will happen. Considering many things, purchasing a watch domestically seems to be the most economical way.