Guidelines on Export Duty Drawback: Required Documents and Paperless Filing Procedures Released

Duty drawback for exported goods is a system designed to support exporters and alleviate their financial burden in accordance with the Act on Special Cases Concerning the Refund of Customs Duties, etc. Levied on Raw Materials for Export. Currently, the general principle for duty drawback applications is Paperless (P/L) filing. When an applicant transmits the application form as an electronic document via the Korea Customs Service's electronic clearance system (UNI-PASS), the customs system automatically audits the entries and legal requirements to process the refund.

Cases Requiring Physical Document Submission

While paperless filing is the standard, document submission is not exempted in all cases. Pursuant to Article 10-2 of the Notice on Refund, you must submit supporting documents directly to the head of the relevant customs office for review under specific circumstances. Common reasons for mandatory document submission include:

• New Applicants: Companies applying for a refund for the first time.
• Significant Fluctuations: Companies with sudden changes in recent refund performance.
• High-Risk Items: Applications involving items with a high risk of over-refund.
• Compliance History: Companies with a history of violating the Customs Act or requiring detailed verification.

Whether your application is subject to document submission is notified in real-time through the system upon receipt of the application.

Essential Documentation for Customs Review

If you are notified to submit documents, you must prepare the materials prescribed in Article 11 of the Notice on Refund. The primary documents include:

• Duty Drawback Application Form: The fundamental request document.
• Export Declaration Certificate: Proof of the actual export of goods (or equivalent documents).
• Import Declaration Certificate: To verify the tax amount paid when importing raw materials.
• Tax Payment Proofs for Domestic Purchases: If raw materials were purchased domestically, documents such as the Basic Raw Material Tax Payment Certificate (K-NAP) or the Certificate of Divisional Tax Payment are required to prove the transfer of the tax burden.

Individual Drawback and Calculation of Required Quantity

For companies using the Individual Drawback method, the Calculation Basis for Required Quantity (BOM-based calculation) is critical. This document details the exact amount of raw materials consumed to manufacture the exported goods. As this serves as the core metric for calculating the refund amount, it must be prepared accurately to match the actual manufacturing process. Additionally, customs may request supplementary documents such as contracts, accounting ledgers, or cost accounting sheets to verify the appropriateness of the refund calculation.

Risk Management and Record Keeping

When preparing for a refund, you should first determine whether your company qualifies for the Simplified Fixed Drawback or the Individual Drawback. Simplified Fixed Drawback is easier as it requires no complex quantity calculations, whereas Individual Drawback requires high-level documentation of raw material consumption. Regardless of whether the initial application was paperless, all exporters are subject to a mandatory document retention period of five years from the date of the refund application. Systematically managing these records is essential for successful post-audit risk management by customs authorities.