South Korea to end cosmetic surgery tax break that fuelled medical tourism boom

The impending termination of a long-running tax incentive that powered South Korea’s booming cosmetic surgery clinics risks driving away cost-conscious foreigners to destinations like Singapore and dealing an economic blow to the local medical tourism sector, industry groups have warned.

South Korea launched the 10 per cent value-added tax (VAT) refund scheme in 2016 for visitors going under the knife for procedures such as facelifts, skin revitalisation, breast augmentation and double-eyelid surgery to boost the appeal of its aesthetic medicine trade.

But the government announced earlier this month that the perk will end on December 31, a decision decried by the Korean Association of Plastic Surgeons.

The group said ending the programme would raise clients’ costs and undermine pricing transparency, a feature that had helped draw thousands of foreign patients to the country’s beauty clinics.

“The tax refund system, created to attract foreign patients, has served as a significant incentive for those sensitive to price,” an official at the organisation told the Korea Herald.

“Ending it removes a key factor behind Korea’s influx of foreign patients. As other countries offer aggressive incentives, more people could shift to competing medical tourism destinations.”