SPECIAL EXCISE TAX
1. Taxpayer
2. Tax Base
3. Taxable Goods and Tax Rates
4. Tax Declaration
5. Non-Taxable Goods
6. Tax Credit and Refund
1. Taxpayer
	Any person who falls under one of the categories below is liable to special excise tax.
	a. A person who manufactures or imports taxable goods (for example, slot machines,
		luxury furniture/carpet, or oil products)
	b. A person who sells Class 3  taxable goods (e.g. jewelry, pearls, etc. and its products,
		excluding diamonds for industrial use)
	c. Operators of such taxable places as horse race courses, bicycle race courses, slot
		machine clubs, golf courses, casinos, nightclubs, etc.
2. Tax Base
	(1) In the case where taxable goods are manufactured, the price at which the goods are
		taken out of the place of manufacture
	(2) In the case of importation, the price at the time of declaration (the sum of the customs
		value and the related customs duties)
	(3) In the case of selling Class 4 taxable goods, the sales price
	Amounts of special excise tax, education tax, and value-added tax are not included in
	the tax base.
3. Taxable Goods and Tax Rates
a. Taxable Goods
	A) Class 1:
		A special excise tax at the rate of 20% shall be levied on each of the following items:
		(a)  slot machines, pin-ball machines, and other similar recreational machines;
		(b)  hunting guns or rifles;
	B) Class 2:
		A special excise tax at the rate of 7% shall be levied on the following items:
		(a) deer antlers, royal jellies; and
		(b) perfumes and colognes.
	C) Class 3:
		A special excise tax at the rate of 20% shall be levied on the amount exceeding two
		million won of the following:
		(a) jewelry (excluding diamonds for industrial use, unprocessed original stones),
			pearl, tortoise-shell, coral, amber, ivory, and their products; and
		(b) precious metal products.
	D) Class 4:
		A special excise tax at the rate of 20% shall be levied on the amount exceeding two
		million won. (in case of luxury furniture, 5 million won):
		(a) luxury camera and accessories;
		(b) luxury watches;
		(c) luxury fur skin and its products (excluding rabbit skin and raw fur skin);
		(d) luxury carpets; and
		(e) luxury furniture.
	E) Class 5:
		Automobiles (excluding automobiles of engine displacement of 800cc or less):
		(a) Automobiles with an engine displacement in excess of 2,000 cc and cars for
			camping: 10%
		(b) Automobiles with an engine displacement of 2,000 cc or less, and two-wheel
			motorcycles: 5%
	F) Class 6:
		(a) Gasoline: 630 won/L
		(b) Diesel oil: 363won/L
		(c) Kerosene: 154 won/L
		(d) Heavy fuel oil: 11 won/L
		(e) Propane gas: 40 won/Kg
		(f) Butane gas: 382 won/Kg
		(g) Natural gas (including liquefied form): 40 won/Kg
		* Transportation tax other than special excise tax shall be levied on gasoline and
		diesel oil until the year of 2006
b. Taxable Places
	(1) Group 1
		The special excise tax rates on the following taxable places are:
		(a) Horse-race park: 500 won per person
		(b) Slot machine places: 10,000 won per person
		(c) Golf courses: 12,000 won per person
		(d) Casinos: 35,000 won per person
			(for foreigners: 2,000 won, none for foreigners-only casinos and abandoned casinos)
		(e) Bicycle race park: 200 won per person
	(2) Group 2:
		The Special Excise Tax rate imposed on entertainment taverns or saloons, etc.: 10%
4. Tax Declaration
	a.    A taxpayer who sells or takes taxable goods out of the place of manufacture shall file
		a declaration concerning the transaction quantity, price and tax base, amounts of unpaid
		tax or tax exemption, amounts of tax credit and refund, etc., by the end of the following
		month, and shall pay the tax amount due by that time.
	b.    Where a taxpayer imports taxable goods and has made an import declaration, he or
		she is regarded as complying with the obligation to file a declaration.
	c.    Operators of taxable places shall file a declaration by the end of the following month
		and pay the tax amount due by that time.
5. Non-Taxable Goods
	The following goods are not subject to Special Excise Tax:
	(1) goods directly manufactured by a person for his own use or the use by a family
		member (excluding a corporation);
	(2) goods on which the simplified tariff are applicable under the Customs Law;
	(3) goods on which the liquor tax is imposed; and
	(4) goods confiscated under the Livestock Products Processing and Dealing Law, the
		Drugs, Cosmetics and Medical Instruments Law, or the Food Sanitation Law.
a. Exemption
	(1) Exemption on exportation or supply to the military
		Goods exported or supplied to a foreign army stationed in Korea are exempt from
		special excise tax upon application for exemption.
		(a) Where a taxpayer fails to prove the facts of exportation or  supply to a foreign
			military service within the prescribed period, the special excise tax is charged
			retroactively.
		(b) Where the goods exempted under the condition of supply to a foreign military
			service are transferred to or owned by other persons within 5 years from the day of
			receiving the license for the exemption, the transferee or the person who owns the
			goods is liable to the Special Excise Tax.
	(2) Exemption for diplomats
		(a) Goods imported or purchased from the manufacturer for official use by foreign
			diplomatic offices
		(b) Goods imported for the personal use by foreign diplomats, foreign aid missions,
			and their family members
		(c) Oil and its products used by the diplomatic offices stationed in Korea
		(d) In the case where the exempted goods are transferred to or are owned by other
			persons within 5 years from the day of receiving the license for the exemption, the
			transferee or the person who owns the goods is liable to the Special Excise Tax
	(3) Exemption of sales outlets exclusively used by foreigners
		(a) Specific goods (e. g., jewelry, automobiles, etc.) for sale in foreign currency to
			non-residents or foreign diplomats at designated sales outlets exclusively used by
			foreigners
		(b) Where the operators of the sales outlets sell the tax exempt goods in Korean
			won, or where a person who has acquired the tax exempt goods at the said sales
			outlets does not possess the goods at the time of departure from Korea, or where a
			person who does not qualify for the acquisition of goods at the said sales outlet
			owns the tax exempt goods, the special excise tax due is assessed retroactively.
	(4) Conditional exemption
		Where the conditions required for exemption are not satisfied, the special excise tax
		is assessed retroactively on:
		(a) goods used for the production of atomic energy or an isotope, or for the
			development of atomic reactor pile;
		(b) jewelry for industrial or experimental use;
		(c) automobiles used exclusively for handicapped persons (the number of tax
			exempt automobiles, regardless of the size of engine displacement driven by a
			handicapped person or others living with him, is restricted only to one per person),
			patients and public transport (automobiles excluded, whose rent period exceeding a
			period of more than 6 months)
		(d) goods donated to charity or relief organizations from foreign countries;
		(e)  goods for religious services donated from foreign countries;
		(f) sample goods or reference goods used at schools, nursery schools, museums
			or other display places;
		(g) goods donated to an academic or educational institution for academic research
			or educational purposes;
		(h)  duty-exempt goods that are to be re-exported;
		(i)  oil and its products used for aircraft, deep sea fishing vessels, or vessels in
			international navigation;
		(j) oil for medical use, manufacture of medical goods, fertilizers, agricultural
			chemicals, or raw materials for the petro-chemical industry;
		(k)  articles of consumption to be used in foreign trade vessels, deep sea fishing
			vessels or aircraft abroad, other than food, beverages, and fuel;
		(l) luxury cameras for use in broadcasting, news reports, communication,  school
			education, or nursery school education.
	(5) Unconditional Exemption
		(a) Goods donated to a foreign charity or relief organization
		(b) Decorations or other similar articles and letters of commendation conferred from
			foreign countries
		(c) Official goods sent by Korean embassies abroad or from military ships in foreign
			navigation
		(d) Containers of export goods that are re-imported
		(e) Goods donated to the government, state, or local authorities
		(f) Goods imported by foreign aid or munitions made from such goods
		(g) Duty exempt personal effects or separately imported goods of a person who
			enters Korea
		(h) Duty exempt goods of a small sum donated to residents
		(i) Duty exempt commercial samples or advertisement goods imported from abroad
		(j) Goods carried out for display at foreign exhibition grounds
		(k) Re-imported goods on which special excise tax was imposed and credit or
			refund was not granted thereon
		(l) Goods used for the secret service of the chief of state
6. Tax Credit and Refund
a. Tax Credit
	Where goods or raw materials on which the Special Excise Tax was charged or is
	chargeable come under one of the following cases, the tax charged or chargeable is
	credited against the concerned tax amount payable.
	(1) The case where taxable goods are delivered from a manufacturer or bonded area
		and are directly used for the manufacture or processing of other taxable goods
	(2) The case where Class 3  taxable goods (e. g., jewelry, pearls, etc.) purchased from
		other sellers or manufacturers, or delivered from a bonded area, are sold
	(3) The case where the taxable goods which were delivered from a manufacturer or
		bonded area, are carried out after some additional work
b. Refund
	Where goods or raw materials on which special excise tax was charged or is
	chargeable come under one of the following items, the paid tax amount is refundable or
	deductible.
	(1) Taxable goods or their products exported or supplied to foreign military stationed in Korea
	(2) Taxable goods made of taxable raw materials that are exempt
	(3) Taxable goods returned to the manufacturing site (excluding used articles, but
		including ones returned by exchange and refund under the Consumer Protection Law)
	(4) Taxable oil and its products used for medical care, for the manufacture of medicine
		or fertilizer, for aircraft, vessels in foreign navigation, deep sea fishing vessels, or by
		foreign diplomatic offices or similar organizations
c. Miscellaneous Rule
	(1)   In the case where the special excise tax is collected with respect to the goods for
		which the conditions for exemption are not satisfied, the tax amount paid or payable on
		the raw materials of the said goods is not creditable or refundable.
	(2)    Penalty taxes chargeable on the goods subject to special excise tax are not
		creditable or refundable.