Busan

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Tax Refund

Information on tax-free shopping and how visitors can claim VAT refunds on eligible purchases.

Sections

1. Overview of Tax Refunds in South Korea

South Korea imposes a Value-Added Tax (VAT) of 10% on most goods and services. As a foreign visitor, you are eligible to claim a refund on the VAT for certain purchases made during your stay. This system is designed to make shopping more attractive for tourists.

2. Eligibility for Tax Refunds

To qualify for a tax refund in Busan (or anywhere in South Korea), you must meet the following criteria:

a. Who is Eligible?

  • You must be a non-resident and non-citizen of South Korea.
  • You must stay in South Korea for less than 6 months.
  • You must be departing South Korea via an international airport or seaport (e.g., Gimhae International Airport in Busan or the Busan Port International Passenger Terminal).

b. Eligible Purchases

  • Goods must be purchased from stores displaying a Tax-Free Shopping or Tax Refund sign.
  • The total purchase amount (including VAT) must be between 30,000 KRW and 5,000,000 KRW per day, per store.
  • The goods must be unused and taken out of South Korea within 3 months of purchase.

c. Ineligible Items

  • Services (e.g., hotel stays, dining, transportation).
  • Consumables that are used in South Korea (e.g., food, beverages).
  • Items purchased without a proper tax refund receipt.

3. Costs and Refund Amount

  • The refund amount is typically 70-85% of the VAT paid. A small processing fee is deducted by the refund service provider.
  • For example, if you spend 100,000 KRW on eligible goods, the VAT is 10,000 KRW, and you can expect a refund of around 7,000-8,500 KRW.

4. How to Claim Your Tax Refund

The process for claiming a tax refund in Busan is straightforward but requires attention to detail. Hereโ€™s a step-by-step guide:

Step 1: Shop at Tax-Free Stores

  • Look for stores with a Tax-Free or Tax Refund sign. Popular shopping areas in Busan include:
    • Gukje Market: Traditional market with a mix of goods.
    • Shinsegae Centum City: The worldโ€™s largest department store.
    • Nampo-dong Shopping Street: A bustling area for fashion and cosmetics.
    • Lotte Department Store: High-end shopping with tax-free options.
  • Inform the cashier that you want a tax refund. They will provide you with a tax refund receipt along with your regular receipt.

Step 2: Keep Your Receipts and Goods

  • Keep all receipts, tax refund forms, and the purchased goods in your carry-on luggage. You may need to show them at customs.

Step 3: At the Airport or Seaport

When departing Busan, follow these steps:

a. Customs Declaration
  • At Gimhae International Airport or the Busan Port, locate the Customs Declaration Counter before checking in your luggage.
  • Present your passport, boarding pass, tax refund receipts, and the purchased goods.
  • Customs officials may inspect the goods to ensure they are unused and eligible for a refund. Once approved, they will stamp your tax refund receipts.
b. Claim Your Refund
  • After clearing customs, proceed to the Tax Refund Counter or Self-Service Kiosks (available at major departure points).
  • Present your stamped receipts and passport. If using a kiosk, follow the on-screen instructions.
  • Refunds can be issued in cash (KRW, USD, or other currencies), credited to your credit card, or sent to a mobile payment app (e.g., Alipay, WeChat Pay).

5. Important Considerations

a. Timing

  • Arrive at the airport or seaport early to allow enough time for the tax refund process, especially during peak travel seasons.

b. Language

  • While many staff members at major shopping centers and airports speak English, itโ€™s helpful to know a few Korean phrases or use a translation app. For example:
    • โ€œTax refund, pleaseโ€ = โ€œํƒ์Šค ๋ฆฌํŽ€๋“œ ์ฃผ์„ธ์š”โ€ (Taekseu ripeondeu juseyo).

c. Refund Providers

  • South Korea uses several tax refund service providers, such as Global Blue, Global Tax-Free, and Korea Tax Refund. Each provider has its own kiosks and counters, so ensure you go to the correct one.

d. Cultural Etiquette

  • Be polite and patient during the process. South Korea values respect and courteous behavior, especially in public spaces.

e. Seaport Departures

  • If departing via the Busan Port International Passenger Terminal, the process is similar to the airport. Look for the customs and tax refund counters in the terminal.

6. Tips for a Smooth Experience

  • Organize Your Documents: Keep all receipts and forms in one place to avoid delays.
  • Shop Strategically: Make larger purchases at fewer stores to maximize your refund.
  • Use Credit Cards: Paying with a credit card can simplify the refund process, as some providers offer direct refunds to your card.
  • Check Refund Limits: Ensure your total purchases donโ€™t exceed the daily or trip limits for tax refunds.

7. Additional Information for Visitors

Currency

  • The local currency is the South Korean Won (KRW). Tax refunds are often issued in KRW, but you can request other currencies at some refund counters.

Shopping Hours

  • Most stores in Busan are open from 10:00 AM to 8:00 PM, though hours may vary.

Transportation to Departure Points

  • Gimhae International Airport: Accessible via the Busan Metro Line 2 and the Busan-Gimhae Light Rail Transit.
  • Busan Port: Easily reachable by taxi or metro (nearest station: Jungang Station on Line 1).

By following this guide, you can enjoy a hassle-free tax refund experience while exploring the vibrant city of Busan. Happy shopping and safe travels!