Korean biotech industry urges government to retain R&D import-duty relief
South Korea plans to remove customs-duty relief for corporate industrial-technology R&D imports from August 1, 2027. The Korea Biotechnology Industry Organization warns that the change would raise development costs, particularly for early-stage companies without revenue or commercial products.
Corporate relief scheduled to end in 2027
South Korea’s biotechnology industry is urging the government to reconsider plans to abolish customs-duty relief for goods imported by companies for industrial-technology research and development. Metro Seoul reported that the proposed amendment would terminate the corporate concession on August 1, 2027, while retaining relief for goods used by schools and public medical institutions.
The government submitted the partial amendment to the Customs Act to the National Assembly’s Strategy and Finance Committee on the 3rd, according to an analysis by the Korea Biotechnology Industry Organization’s Bioeconomy Research Center. The change is expected to increase tax revenue by 45 billion won over five years. The association argues that the additional revenue should be weighed against higher research costs and the possible loss of competitiveness in advanced industries.
Customs duty becomes a direct development cost
The industry group emphasized the different treatment of import value-added tax and customs duty. Companies can recover import VAT through input-tax deductions, but customs duty is a final expense that cannot be refunded. For biotechnology businesses still developing drugs, particularly those without revenue or a commercial product, that expense feeds directly into R&D costs.
The association cited the 2025 Survey of the Domestic Bioindustry, which covered 1,120 responding companies. Of these, 494 companies, or 44.1%, had either not yet generated revenue or had not reached break-even. The group said the removal of the concession would therefore have its greatest effect on start-ups and venture companies already facing financing constraints.
Rates vary across research pipelines
The potential impact depends on the products a company imports. Antibodies can enter at a zero tariff, but a business may later require synthetic peptides, low-molecular-weight compounds or diagnostic reagents as its research advances or its pipeline expands. Metro Seoul reported that tariffs on such products can reach 8%, placing companies with initially duty-free inputs within the scope of the policy risk.
The Korea Biotechnology Industry Organization also pointed to international policy differences. It said the European Union, Japan and the United Kingdom apply zero tariffs to pharmaceuticals and R&D goods, while the United States provides a duty-free exception for pharmaceuticals used in research and development. The association called for the abolition plan to be reviewed and proposed either maintaining the current 80% relief rate or reducing it to 50% instead of ending the concession entirely. The decision will affect the landed cost of imported research inputs and the cash available to Korean companies for drug development.