Gov’t mulls measures for overseas direct purchases

[Courtesy of Temu]

The South Korean government is considering measures to strengthen the duty-free limit for overseas direct purchases to respond to the onslaught of Chinese e-commerce platforms such as AliExpress, Temu, and SHEIN.

According to multiple sources on Sunday, the country’s Ministry of Economy and Finance is currently assessing the overall duty-free system for overseas direct purchases to come up with measures to improve the system.

This move comes amid growing calls for improvements to the country’s customs clearance and tariff systems as Chinese e-commerce platforms rapidly dominate the Korean market, creating controversies over counterfeit products, personal information leakage, and split purchases.

Korea currently does not require customs duties and value-added taxes for overseas direct purchases of up to $150 per transaction made on the same day from the same website. This means that one can make purchases of up to $150 from Chinese e-commerce platforms such as AliExpress, Temu, and SHEIN every day for a month or an entire year without paying taxes.

Oh Se-hee, chair of the Korea Federation of Micro Enterprise (KFME), recently proposed imposing taxes and certification obligations on direct purchase products and setting an annual payment limit during a meeting with Ko Kwang-hyo, commissioner of the Korea Customs Service.

Accordingly, the Ministry of Economy and Finance is looking into various measures, including adjusting the duty-free limit for overseas direct purchases on an annual basis.