🧪 The Cosmetics Cost Breakdown

17%-27%

Standard VAT/consumption-tax rate charged at checkout in EU member states — a Korean brand cannot control this, and it is separate from Korea's own 10% VAT

Duty varies

US and EU import duty on cosmetics (HTS/TARIC heading 3304) depends on the exact product classification and country of origin, and U.S. rates have been layered with additional country-specific tariff actions repeatedly through 2025-2026

No public %

No regulator or brand publishes what a specific overseas distributor or retailer marks a K-beauty product up by — each distribution contract is private

EU member states each set their own standard VAT rate under EU rules, ranging from 17% (Luxembourg) to 27% (Hungary), averaging roughly 21.8% across the bloc. That tax is charged on the import/sale price in that country and has nothing to do with how the product was priced or discounted in Korea.

Cosmetics imported into the US are classified under Harmonized Tariff Schedule heading 3304. The applicable duty depends on the specific subheading and country of origin, and the US added extra country-specific “reciprocal” tariff layers on top of the baseline rate during 2025-2026 trade actions that have been paused, revised and legally contested more than once — treat any specific percentage you read elsewhere as a snapshot of one moment, and check the current official HTS entry before relying on it for an actual shipment.

Beyond tax and duty, a brand selling abroad typically also pays international freight per unit, a local distributor or master-license margin, and the destination retailer's own markup. Each is a real, separate cost line — but none of them has one universal published percentage, so a single “K-beauty markup is X%” claim you see elsewhere is usually an estimate from one product or one blogger's experience, not an audited industry figure.

The distributor layer is a gatekeeping story as much as a tax story: an exclusive local distributor or master-license contract typically controls the minimum price the product is allowed to sell at in that country. That negotiated control — not the tax layer — is usually the larger lever on the final price gap, but AMS cannot quantify it without seeing an actual distribution agreement, which are not public.

Foreign-issued cards and cross-border checkouts commonly carry a currency-conversion or foreign-transaction fee of roughly 1-3%, charged by the card network or issuer rather than the brand. That is a separate, smaller layer from the tax and distribution markup above — related payment-friction issues on the Korean side of a purchase are covered separately: why foreign cards can fail at Korean checkout.