"I Bought Gold Because Everyone Was Making Money... The Reason Behind Unexpected Losses"

Overseas Direct Purchases Surge Amid Gold Investment Boom
Check Precious Metal Tax Rates to Avoid Unexpected Losses

Recently, as the gold investment craze continues, the purchase of precious metals through overseas direct purchases has tripled compared to the previous year. In response, customs authorities have warned that the customs duties and value-added tax imposed during the import process may exceed the profit margin from selling these items, urging caution.

A customer visiting the Korea Gold Exchange Jongno Main Branch in Jongno-gu, Seoul is inquiring about purchasing gold bars.

Number of Imported Gold and Silver Ornaments at Incheon Airport Surges 202% This Year

According to the Incheon Airport Customs Headquarters on December 30, the number of gold and silver ornaments, such as gold bars, imported through overseas direct purchases and brought into Incheon Airport reached 1,086 cases (8.93 million dollars) by the end of November this year. This represents a 202% increase in the number of cases and a 124% increase in value compared to 360 cases (3.99 million dollars) during the same period last year. During the same period, investment gold and silver coins also recorded 4,084 cases (28.01 million dollars), up 90% in number and 572% in value compared to 2,148 cases (4.17 million dollars) in the previous year.

This surge is attributed to international gold and silver prices reaching all-time highs, sparking an investment boom in gold and silver domestically. As investments increased, a new term, "Geumchi Premium" (gold + kimchi premium), emerged to describe domestic gold prices being 15 to 20% higher than international prices. This led to a widespread perception that "it's cheaper to buy from overseas," fueling the sharp rise in overseas direct purchases.

Customs Duty Rates for Precious Metal Direct Purchase Items. Incheon Airport Customs Headquarters

Gold and Silver Bars Subject to 8% Customs Duty and 10% Value-Added Tax... Failing to Calculate Tax Rates Can Be Costly

However, the Incheon Airport Customs Headquarters has warned that purchasing gold and silver products overseas simply because they are cheaper than in Korea may result in unexpected losses. Gold and silver bars bought for investment purposes are classified as gold and silver ornaments, subject to an 8% customs duty and a 10% value-added tax. The total tax burden can exceed the domestic premium on these items.

In addition, bullion coins issued by various governments, such as the "Maple Leaf Silver Coin" (Canada) and the "Eagle Silver Coin" (United States), are not considered legal tender for circulation but are instead treated as general or investment goods whose value fluctuates with the price of raw materials. As a result, even if the customs duty rate is 0%, a 10% value-added tax must still be paid.

Park Heon, Director of the Incheon Airport Customs Headquarters, stated, "With the year-end and New Year holidays approaching, overseas direct purchases of precious metal products for gifts and investment are expected to increase further," and urged, "Please make sure to fully understand the tax rates for each item before purchasing to avoid any confusion during the customs clearance process."