Bonded Warehouse Korea: When Do You Pay Duty?

You do not pay customs duty in Korea just because goods enter a bonded warehouse. Duty is fixed through the tax return you file together with the import declaration, and it is normally due within 15 days of the date that return is accepted (Customs Act Art. 38 and Art. 9). That said, bonded storage has time limits, the law expects an import declaration within 30 days of entry, and some bonded areas charge a late-filing surcharge, so a bonded warehouse is not an open-ended way to postpone clearance. This guide covers storage periods, when duty is paid, and what happens if you run out of time.

Key takeaways

A bonded warehouse holds foreign goods and goods awaiting clearance; no duty is paid on entry (Customs Act Art. 183).
Duty is assessed on the nature and quantity of the goods at the time of the import declaration, under the law in force then (Art. 16, Art. 17), and is normally due within 15 days of acceptance of the tax return (Art. 9).
By law the storage period for foreign goods is set by the Korea Customs Service (KCS) within one year and can be extended within one more year (Art. 177); the KCS notice sets six months for bonded warehouses and two months for certain warehouses at Incheon and Gimhae airports and Busan and Incheon ports.
Goods must be declared within 30 days of entry; for bonded areas and goods designated by the KCS, late filing adds a surcharge of up to 2% of the customs value (Art. 241, Enforcement Decree Art. 247).
Foreign goods left past the storage period can be sold by customs after public notice (Art. 208).

What is a bonded warehouse, and what can be stored there?

A bonded warehouse is a licensed bonded area operated under a customs licence, used to store foreign goods or goods intended for clearance (Customs Act Art. 183(1)). What sets it apart from an ordinary warehouse is that foreign goods can sit there before the import declaration is accepted, without duty being paid. With prior notice to customs, the operator may also store domestic goods as long as this does not interfere with foreign-goods storage (Art. 183(2)).

Goods in a bonded warehouse remain under customs control, so every entry and release is reported and recorded. Importers usually use one by contracting with the warehouse operator rather than running it themselves, and storage and handling fees differ by operator, so get a quote before moving goods in.

How long can goods stay in a bonded warehouse?

The Customs Act lets the KCS Commissioner set the storage period for foreign goods in a bonded warehouse within one year, and the head of customs may extend it within one more year where necessary (Art. 177(1)(1)). The actual periods are set by the KCS Notice on Storage Periods of Bonded Goods and Management of Overdue Goods: six months for ordinary bonded warehouses and two months for certain warehouses inside major airports and ports. Goods the law singles out, such as government stockpiles, may stay for as long as stockpiling requires.

Type	Standard period	Extension	Basis
Goods entering a bonded warehouse (general)	6 months	Up to 6 months if customs approves	Notice Art. 4(5)
Bonded warehouses in the Incheon and Gimhae airport areas (excluding private-use ones); bonded warehouses inside Busan and Incheon port terminals and container bonded warehouses outside them (incl. CFS)	2 months	Up to 2 months if customs approves	Notice Art. 4(8)
Government stockpiles, defence-industry stockpiles, long-term export raw materials and similar goods approved by customs	As long as stockpiling requires	-	Act Art. 177(1)(1)(c), Notice Art. 4(6)

Because the period depends on where the warehouse is and what type it is, confirm the period for your specific warehouse with the operator or the local customs office before goods arrive. Customs may also order the operator to release goods during the storage period if needed for cargo control (Art. 177(2)).

When does the storage period start, and how do you extend it?

The storage period runs from the day the goods enter the bonded area (Notice Art. 5(1)). To extend it, the cargo owner or an authorised agent files an application for approval of an extended storage period with customs and must receive approval (Notice Art. 4(10)). The notice sets no specific filing deadline, so the safe approach is to apply well before the period ends.

A few counting rules are worth knowing. If goods under one B/L arrive in several lots, the period runs from the day the last lot arrives (Notice Art. 5(2)). If goods already past their period are moved to another bonded area under bonded transport, the earlier time is added (Art. 5(1)(2)). For commercial bonded warehouses, the operator must send the cargo owner a release notice at least 30 days before the period expires (Notice Art. 6 and Art. 7), so treat that notice as your cue to extend or schedule clearance.

When is duty fixed, and when do you pay it?

Duty is assessed on the nature and quantity of the goods at the time the import declaration is filed, under the law in force on that date (Customs Act Art. 16 and Art. 17). The importer files a tax return together with the import declaration (Art. 38(1)), and the payment deadline is normally 15 days from the date that return is accepted (Art. 9(1)(1)). So the clock for paying duty starts with the import declaration and its acceptance, not with the day goods enter the warehouse.

You may also pay before the import declaration is accepted (Art. 9(2)). Compliant taxpayers that meet KCS requirements can apply for monthly payment, settling all amounts due in the same month by the end of that month (Art. 9(3)). Estimating duty depends on correct classification, so check how to look up and classify an HS code first.

Step	What it means for duty	Basis
Entry into bonded warehouse	No duty paid; storage period starts	Act Art. 183, Notice Art. 5
Import declaration and tax return	Nature, quantity and applicable law are fixed	Act Art. 16, 17, 38
Acceptance of the tax return	Pay within 15 days (paying before acceptance is allowed)	Act Art. 9

Is there a surcharge if you delay the import declaration?

The Customs Act requires anyone who brings goods for import into a designated storage area or bonded warehouse to file the import declaration within 30 days of entry (Art. 241(3)). A surcharge for missing that deadline applies only to goods designated by Presidential Decree and the KCS (Art. 241(4), Enforcement Decree Art. 248). It ranges from 0.5% to 2% of the customs value depending on how late the filing is, capped at KRW 5 million (Enforcement Decree Art. 247).

Article 34 of the KCS Notice on Bonded Cargo Management limits the surcharge to goods entering the bonded areas listed in its Annex 1, such as designated storage areas and bonded warehouses at the Incheon and Gimhae airport unloading points and container bonded warehouses (CY) and container freight stations (CFS) in and around Busan and Incheon ports, plus items the KCS announces, such as certain tariff-quota goods. It is easy to assume that a surcharge kicks in when the storage period runs out, but the Article 241 surcharge is about missing the 30-day filing deadline after entry. Ask the operator or a customs broker whether your warehouse is on the Annex 1 list.

Low-angle view of cardboard boxes stacked on tall shelves in a dim warehouse, suggesting goods held in bonded storage before clearance

Can goods stay in the bonded warehouse after clearance?

Goods whose import declaration is accepted while they sit in the same bonded warehouse may stay there without a further report (Customs Act Art. 183(2), proviso). However, goods that entered one of the airport and port bonded areas listed in Annex 1 must be removed within 15 days of acceptance, and breaching this can lead to a fine (KCS Notice on Bonded Cargo Management, Art. 19). If you plan to keep goods in place after clearance, first check whether your warehouse is on that list.

What happens when the storage period runs out?

Once the storage period for foreign goods in a bonded area has passed, customs may publish a notice and then sell the goods (Customs Act Art. 208(1)). Live animals and plants, perishable goods, and goods whose value would drop sharply with time can be sold after notice even before the period ends (Art. 208(1), proviso). For goods sold this way, the taxable object is fixed at the time of sale (Art. 16(10)).

Once a sale procedure starts, clearing the goods on your own timing becomes difficult, so if you receive a release notice or the period is close to ending, secure an extension or schedule the import or return declaration first.

How much does deferring duty change your cash flow? (hypothetical)

The figures below are a hypothetical calculation for illustration, not real rates or costs. Assume goods with a customs value of USD 10,000 and an 8% duty rate: the duty would be USD 800, and delaying the import declaration pushes that payment back by the same amount of time. Storage fees and financing costs accrue meanwhile, and the 30-day filing rule and any surcharge also apply, so work out the real benefit separately with actual quotes and terms.

Assumption: customs value USD 10,000, duty rate 8% (example values)
Duty (hypothetical): 10,000 × 8% = USD 800
Not included: VAT and other domestic taxes, the customs exchange rate, storage and handling fees, any late-filing surcharge

Who pays import duty also depends on the Incoterm; if the seller bears clearance costs, see DAP vs DDP: who pays the duties.

What mistakes do importers commonly make?

The most common mistake is treating the legal maximum (one year plus one year) as the storage period without checking the period actually set by the notice (six or two months). The second is missing the 30-day filing deadline after entry in a bonded area that charges the surcharge. Many importers also skip getting a storage quote, so costs build up the longer goods stay.

Assuming one year without checking whether a six-month or two-month warehouse applies
Missing the 30-day import declaration deadline in a surcharge-designated bonded area
Ignoring the release notice, so the goods move toward a customs sale
Not checking whether the warehouse carries a 15-day removal duty after clearance
Committing to long storage without a storage and handling quote

For ocean cargo headed to the United States, there is also a pre-loading filing duty separate from Korean bonded storage; see ISF 10+2 deadlines.

FAQ

Do I pay duty as soon as goods enter a bonded warehouse?

No. Nothing is paid on entry. You file the tax return with the import declaration and normally pay within 15 days of its acceptance (Customs Act Art. 9 and Art. 38).

Is the bonded warehouse storage period one year or six months?

The Act lets the KCS set a period within one year, extendable within one more year (Art. 177). The KCS notice sets six months for ordinary bonded warehouses (extendable within six months) and two months for certain warehouses at Incheon and Gimhae airports and Busan and Incheon ports (extendable within two months).

By when must I apply for an extension?

The notice sets no separate filing deadline; file the extension application and obtain customs approval before the storage period ends. Commercial bonded warehouse operators send a release notice at least 30 days before expiry, so start preparing as soon as you receive it.

How are storage fees set?

Storage and handling fees are not fixed by law; they come from your contract with the operator. They vary by warehouse, so get a quote before the goods arrive.