Overseas Direct Purchases Surge Amid Gold Investment Boom
Check Precious Metal Tax Rates to Avoid Unexpected Losses
With the recent surge in gold investment, the purchase of precious metals through overseas direct purchases has tripled compared to the previous year. In response, customs authorities have cautioned that the customs duties and value-added tax (VAT) imposed during the import process may exceed the profit from price differences upon sale, urging consumers to exercise 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 Artifacts at Incheon Airport Soars by 202% This Year
According to the Incheon Airport Customs Headquarters on December 30, the number of gold and silver artifacts, including gold bars, imported through overseas direct purchases via Incheon Airport reached 1,086 cases (USD 8.93 million) 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 (USD 3.99 million) during the same period last year. During the same period, investment gold and silver coins also recorded 4,084 cases (USD 28.01 million), marking a 90% increase in the number of cases and a 572% increase in value compared to 2,148 cases (USD 4.17 million) in the previous year.
This trend is attributed to international gold and silver prices reaching all-time highs, sparking an investment boom in gold and silver domestically. As investment demand surged, a new term, "Geumchi Premium" (Gold + Kimchi Premium), emerged to describe domestic gold prices being 15-20% higher than international rates. This led to the perception that "it's cheaper to buy from overseas," fueling the sharp rise in overseas direct purchases.
Gold and Silver Bars Subject to 8% Customs Duty and 10% VAT... Failing to Calculate Tax Rates Can Lead to Losses
However, the Incheon Airport Customs Headquarters has warned that purchasing gold and silver products from overseas solely because they are cheaper than domestic options may result in unexpected losses. Gold and silver bars purchased for investment purposes are classified as gold or silver artifacts and are subject to an 8% customs duty and a 10% value-added tax. The combined tax burden may exceed the premium on domestically traded items.
In addition, bullion coins such as the "Maple Leaf Silver Coin" (Canada) and the "Eagle Silver Coin" (United States), issued by various governments, are not considered legal tender for circulation but are instead regarded as general or investment goods whose value fluctuates according to the market price of raw materials. As a result, while the customs duty rate is 0%, a 10% value-added tax must still be paid.
Park Heon, Head of 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 applicable tax rates for each item before making a purchase to avoid confusion during the customs clearance process."
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