Port of Pusan designated as TFZ in first half of this year

The Port of Pusan, in the first 6 months, seems to be labeled as a Tax Free Zone, a first in Korea.

An official at the Ministry of Finance and Economy (MOFE) said on Feb. 6th that recently Pusan and the Ministry of Maritime Affairs and Fisheries narrowed their views to designate two terminals, including the Kamman Terminal and Kamchon harbor, as Tax Free Zones. He also posted that Pusan is scheduled to apply for registration by next month and that Pusan might be the first TFZ in Korea.

The Kamman Terminal is an exclusive container terminal completed in 1998, and Kamchon harbor is under development as an overseas fishing headquarters and sea products logistics center.

Pusan tried to assign the whole Port of Pusan as TFZ, but port companies resisted this plan. The city at first set only two places, which have spare space behind for production factories, to be designated TFZ and to expand into other places thereafter.

Port companies declared themselves against TFZ designation because import and export cargoes might be delayed by tougher inspections and reports with increased inspection centers and stationed customs officials, if the TFZ designation goes through.

Meanwhile, MOFE expects Inchon International Airport to apply for TFZ in the second half of this year, after the air port opens this March and is fully on track.

For the Port of Kwangyang, TFZ status will be decided upon after the completion of the long - term development project currently underway.

If a place is set as TFZ, overseas and domestic products used and flowing through the area will be exempted from customs and value-added taxes. Further, foreign investments, over $300 billion there, benefited from corporate tax and leasing fee exemption, if they leased national lands.