South Korea's secondhand trading market has grown from 4 trillion won in 2008 to 43 trillion won in 2025, but the current tax system, which allows operators to claim a VAT "deemed input tax credit" when purchasing secondhand goods from individuals, covers only a few categories such as used cars and recyclable waste, while popular export items such as K-pop photocards, limited-edition merchandise, and secondhand clothing are excluded.

Key points

  • The Korea Internet & Security Agency estimates that South Korea's secondhand trading market has grown from 4 trillion won in 2008 to 43 trillion won in 2025; the global recommerce market is projected to reach $2.87 trillion by 2035.
  • Since 2023, the National Tax Service has collected transaction data from platforms such as Danggeun, Bunjang, and Secondhand Nara, making transactions between operators and individual sellers traceable and verifiable.
  • In April 2026, lawmaker Park Soo-young introduced an amendment to the Restriction of Special Taxation Act that would grant a deemed input tax credit for secondhand goods with an export declaration; the bill remains under review by the National Assembly's Strategy and Finance Committee.

According to data from the Korea Internet & Security Agency, South Korea's domestic secondhand trading market grew from 4 trillion won in 2008 to about 43 trillion won in 2025, an approximately tenfold expansion. The cross-border segment is growing even faster: Bunjang Global, a service under Bunjang that helps overseas buyers purchase goods directly from Korean sellers, saw transactions in the first half of 2026 increase 56% year on year. K-pop photocards and limited-edition merchandise are representative categories of this overseas demand—goods circulating domestically in South Korea are finding new buyers abroad, and secondhand goods have accordingly acquired the attributes of "export goods."

The transaction chain is usually completed by platforms plus purchasing and shipping agents: individual Korean sellers list goods on a platform, overseas consumers place orders, and the seller sends the goods to the warehouse of a Korean logistics agent, which verifies the goods and handles international shipping and customs clearance. In this structure, individual sellers can deliver goods to overseas buyers without having to ship them themselves.

The contradiction lies in the link of "operators purchasing directly from individuals and reselling." The normal logic of South Korea's VAT is that in transactions between businesses, the seller issues a tax invoice and the buyer uses it to claim input tax. But when the seller is an individual rather than a taxable operator, no invoice can be issued, and the purchaser has no way to claim a credit. To address this, Article 108 of the Restriction of Special Taxation Act allows operators purchasing recyclable waste and used cars a "deemed input tax credit," meaning that without actually obtaining a tax invoice, the purchase amount multiplied by a fixed ratio is treated as input tax already paid. The ratio for used cars is 10/110 of the purchase amount, and for recyclable waste it is 3/103.

The problem is that most secondhand goods, such as secondhand clothing, photocards, and general electronics, are not on this list. Operators who likewise buy from individuals and resell are treated completely differently in terms of whether they can claim a VAT credit, simply because of the category they deal in. Some argue that since the secondhand market used to be centered on used cars and has now expanded greatly in categories and scale, it is necessary to review whether the current scope of the credit remains reasonable.

The export link is even more complicated. Under South Korea's Value-Added Tax Act, exported goods are in principle subject to a zero rate, and ordinary export enterprises can claim a credit or refund for VAT borne at the time of purchase; but operators who purchase secondhand goods from individuals find it difficult to do so because they have no tax invoice. The industry therefore questions why exporters who buy new goods from businesses and exporters who buy secondhand goods from individuals do not receive equal tax treatment when both sell goods to overseas consumers.

The opposing side also has a position: the deemed input tax credit is itself a special tax treatment. Individual sellers do not separately pay VAT or issue invoices when selling secondhand goods, so granting a credit as if a tax amount had been paid amounts to giving a tax benefit for a link where no tax was actually paid. If the scope were extended to general secondhand goods, it would also be necessary to consider which categories and which operators to recognize, and how to coexist fairly with other industries. Collectible goods are even trickier: photocards, limited-edition merchandise, and even luxury goods may be resold at prices far higher than the individual's original purchase price, and if a credit is granted based on the purchase amount, the appreciation portion could also fall within the scope of support.

One basis for institutional improvement is that transactions now leave a trace. Since 2023, the National Tax Service has obtained transaction data from online secondhand trading platforms, and transactions on platforms such as Danggeun, Bunjang, and Secondhand Nara have entered the tax authorities' data collection scope. Unlike past cash transactions between individuals, there is now a basis for verifying both parties and the amount.

On this basis, in April 2026, Park Soo-young, a lawmaker of the People Power Party, introduced an amendment to the Restriction of Special Taxation Act that would grant a deemed input tax credit for secondhand goods with an export declaration, with the idea of not opening up all categories but starting with goods that can prove they were actually exported. The bill remains under review by the National Assembly's Strategy and Finance Committee.

Granting the credit only for exports may give rise to new fairness disputes: the same operator buying the same secondhand goods from the same individual could claim a credit when selling to overseas consumers but not when selling to domestic consumers. How to choose between "supporting the export industry" and "balancing the tax burden of domestic and export operators" remains an unresolved issue.

In its recently published "2026 National Affairs Audit Issue Analysis," the National Assembly Research Service listed the expansion of the scope of the deemed input tax credit for recyclable waste and other items and the adjustment of credit rates as inspection matters for the Ministry of Economy and Finance, on the grounds that both the scale and methods of secondhand trading have changed and it is necessary to assess whether to adjust the existing credit targets and rates.

An industry insider said that Korean secondhand goods such as K-pop photocards and limited-edition merchandise are not merely used items but goods with scarcity and cultural value, and overseas demand is strong; secondhand trading should not be seen merely as an exchange of items between individuals, and an institutional foundation should be built so that it can be cultivated as a new export industry.

Source: "한국산 포토카드·굿즈 삽니다" 커지는 K-중고거래, 낡은 세제가 발목? · Originally published 2026-10-13