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    Tax Policy on Alcohol
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    Tax Policy on Alcohol

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    Tax Policy on Alcohol
    South Korea

    The below version control table serves to document all updates made to the report. The purpose is to ensure the information is always accurate and up-to-date.

    Version Number
    Content Creation Date
    		Publishing DateSection(s) Updated & Reason(s) for Update
    V0
    11 July 2024
    		16 July 2024N/A (new report)
    V1
    08 June 2025
    		24 June 2025
    		Overall review and update to references.
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    1. General Requirements on Tax Policy for Alcohol

    The liquor taxpayers are the following individuals:

    1. Locally produced - Individuals who manufacture alcoholic beverages and ship them from the manufacturing site (in the case of contract manufacturing, the consigner).
    2. Imported - Individuals who import alcoholic beverages and are obliged to pay customs duties under the Customs Act. [1]

    There are two different methods of applying tax based on the types of alcoholic beverages:

    1. Based on Quantity: The tax is calculated according to the volume of the alcoholic beverages declared at the time of dispatching (locally produced) or import – Spirits, takju (Korean turbid rice wine), and beer.
    2. Base on Price: The tax is determined by the price of the alcoholic beverages at the time they are removed from the manufacturing facility (locally produced) or at the time of import declaration – Alcoholic beverages other than spirits, takju, and beer. [1]

    The price at the time of import declaration is the sum of the amount of customs value and the customs duty [2]. 

    The tax rates for alcoholic beverages are defined in Article 8 of the Liquor Act [1] as follows:

    1. Spirits: KRW 57,000 per kilolitre (an additional KRW 600 per degree above 95 degrees is added for alcohol content exceeding 95 degrees).
    2. Fermented Alcoholic Beverages
      1. Takju: KRW 44,400 per kilolitre
      2. Yakju (Korean clear rice wine), fruit wine, Cheongju (Korean refined rice wine): 30% of the price
      3. Beer: KRW 885,700 per kilolitre
    3. Distilled Alcoholic Beverages: 72% of price. 
    4. Other Alcoholic Beverages
      1. Substances in powder form that can be dissolved to produce beverages with an alcohol content of at least 1 degree: 72% of price.
      2. Alcoholic beverages produced through fermentation that are not covered under the category “Fermented Alcoholic Beverages”: 30% of price.
      3. Beverages created by adding distilled spirits to rice and nuruk (a type of grain koji, where molds are cultured by inoculating rice) and then filtering. Alternatives include those made by filtering after adding ingredients specified by a Presidential Decree: 72% of the price, except for the alcoholic beverages with a non-volatile content of 30 degrees or more, and the tax rate is set at 10%.
      4. Drinks made by blending those produced through fermentation with those categorized as “Spirits” and “Distilled Alcoholic Beverages”, excluding those specified in “Fermented Alcoholic Beverages": 72% of the price.
      5. All other alcoholic beverages that do not fit the categories above: 72% of the price. 

    2. Specific Requirements per Product

    1) Beer

    The liquor tax on beer is calculated based on quantity, amounting to KRW 885,700 per kilolitre. There is an 80% tax reduction for beer sold in a container of 8 liters or more using a separate extractor, applicable until 2026 [1].

    2) Ready-to-drink beverages (mainly Chuhai*)

    The liquor tax on ready-to-drink alcoholic beverages falls under Other Alcoholic Beverages; it is calculated based on the price at the time of import declaration, and 72% of this price is payable [1]. 

    3) Whisky, around 45% alcohol

    The liquor tax on Whisky falls under Distilled Alcoholic Beverages; it is calculated based on the price at the time of import declaration, and 72% of this price is payable [1]. 

    3. Other Rules

    Education tax

    In addition to the liquor tax, some liquors are subject to Education tax [3]. The education tax is imposed on the liquor taxpayer as defined in the Liquor Tax Act (see Section 1- General requirements - above). It does not apply to spirits, takju, or yakju. 

    1. Beer: Taxed at 30% of the payable liquor tax.
    2. Ready-to-Drink Beverages (mainly Chuhai): Taxed at 30% of the payable liquor tax.
    3. Whisky – 30% of the payable liquor tax. 

    Conclusion
    1. In South Korea, both liquor and education taxes are levied on alcoholic beverages. 
    2. Beer is subject to a liquor tax of KRW 885,700 per kilolitre, plus an education tax at 30% of the liquor tax.
    3. Ready-to-drink beverages (mainly Chuhai) incur a liquor tax equivalent to 72% of the price at the time of import declaration, plus an education tax at 30% of the liquor tax.
    4. Whisky (Distilled alcoholic beverages) incurs a liquor tax equivalent to 72% of the price at the time of import declaration, plus an education tax of 30% of the liquor tax.

    4. References

    1. Liquor Tax Act (issued on 31 Dec 24)

    https://www.law.go.kr/LSW/lsInfoP.do?lsId=001566&ancYnChk=0#J21:0

    2. Article 5 of the Liquor Tax Act Enforcement Decree (issued on 28 Feb 25)

    https://www.law.go.kr/lsInfoP.do?lsId=004938&ancYnChk=0#0000

    3. Education Tax (issued on 21 Jan 2025)

    https://www.law.go.kr/법령/교육세법


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