Customs Valuation for New Product Samples: Proper Declaration Procedures for Items Without Established Market Prices Released

Common Concerns Regarding Sample Import Valuation

Many business owners and procurement managers often face a dilemma when importing samples. Since these items are for testing or market research and may not have a set market price yet—or are provided free of charge—there is a common misconception that they can be declared at a nominal value to fit within the USD 250 duty-free limit for commercial samples.

Guidelines from the Korea Customs Service

According to the relevant regulations, the valuation of such goods must follow specific legal standards rather than arbitrary pricing:

• Article 30 of the Customs Act: The dutiable value of imported goods is generally the transaction value—the price actually paid or to be paid for the goods when sold for export to Korea, adjusted by statutory additions.
• Article 17, Item 1 of the Enforcement Decree: Goods imported free of charge are not considered "goods sold for export." Therefore, the transaction value method (Article 30) cannot be used to determine the dutiable value.
• Articles 31 through 35: For free-of-charge items, the customs value must be determined by sequentially applying alternative methods, such as using the transaction value of identical or similar goods.

Prohibition of Arbitrary Price Setting

Consequently, it is strictly prohibited to declare a sample at a fraction of its expected cost (e.g., 1/10th of the normal price) simply to stay under the duty-exempt threshold. You must declare a value that reflects a realistic market price, derived through the sequential application of Articles 31 to 35 of the Customs Act.

Professional Advice for Risk Management

In practice, many importers still attempt to declare very low values for samples to minimize taxes. However, it is important to understand the following conclusion:

If a product is intended to be sold for $1,000 in the future, it should not be declared at $100 for the sampling phase. Instead, it should be declared at a value close to its anticipated market price or production cost. Failing to do so may lead to significant issues during post-clearance customs audits.

To mitigate potential legal and financial risks, we strongly recommend establishing a "normal price" based on objective data and preparing your shipping documents accordingly, even for items currently lacking a formal market price.