Louis Vuitton Korea has filed a petition with the Tax Tribunal contesting customs duties assessed by Korean authorities, according to confirmed sources. Valentino Korea has also objected to its customs assessments, filing two separate petitions with the Tax Tribunal, as foreign luxury brands increasingly challenge Korean customs rulings.
According to the Korea Customs Service and luxury industry sources on Oct. 21, Louis Vuitton is pursuing appeals against the customs service's 2024 reassessment of dutiable values on roughly 10,000 import declarations filed between 2020 and 2023, which led to additional duties being imposed.
The customs service took the action after finding that Louis Vuitton had raised consumer retail prices while lowering the prices of products imported from its overseas affiliates. Louis Vuitton objected to the assessment and filed a pre-assessment review with the customs service in 2024, but the request was rejected. After paying the duties, the company filed a petition with the Tax Tribunal.
Louis Vuitton also determined that it could recover a portion of the duties already paid and recorded the amount as a receivable. This figure grew from 12 billion won ($8.8 million) at the end of 2024 to 26.3 billion won ($19.2 million) at the end of last year. Valentino Korea had earlier filed two petitions with the Tax Tribunal over a similar import-price dispute and recovered previously paid duties.
Louis Vuitton also clashed with the National Tax Service over corporate taxes related to import prices between 2014 and 2018. At the time, the tax authority concluded that Louis Vuitton had set import prices too high, resulting in understated profits attributed to its Korean unit, and imposed additional corporate taxes. Louis Vuitton objected and filed a tax appeal, which resulted in a partial refund decision. Prada Korea similarly disputed corporate taxes with the National Tax Service over the pricing of products imported from its overseas headquarters and received a partial refund in 2024.
"In the past, corporate tax disputes with foreign luxury companies were the main issue, but the battleground has now shifted to customs appeals," a retail industry official said. "Because there is no clear standard for calculating import prices, luxury brands appear to be adjusting import prices like rubber bands to minimize their customs and corporate tax burdens."
