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.\nSouth 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.\nBut the government announced earlier this month that the perk will end on December 31, a decision decried by the Korean Association of Plastic Surgeons.\nThe 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.\n\n“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.\n“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.”\nSouth Korea welcomed about 1.17 million medical tourists last year, mostly from China, Japan and the United States, government data showed.\nForeign patients spent US$840 million on healthcare in 2024 and dermatology treatments accounted for 56.6 per cent of all procedures, with 705,000 cases.\nThe government handed out 95.5 billion won (US$64 million) in tax refunds in 2024 and 82.6 billion won in the first half of this year.\nTravel platform Yanolja reported that “quality and trust” in South Korea’s medical services had fostered a loyal foreign customer base, but industry groups worry that ending the tax break could weaken the local market and allow Singapore and Thailand, which also offer advanced health tourism infrastructure, to gain ground.\n“Many Chinese consumers are extremely price-sensitive,” an official at a beauty clinic in Seoul’s Gangnam district said, as quoted by the Herald.\n“If Korea is perceived as becoming more expensive, more patients may stay in China or turn to Southeast Asian destinations.”\nSouth Korea dominates 62 per cent of China’s outbound medical and beauty tourism market.\nThe global medical tourism market is valued at US$43.51 billion this year and is expected to hit US$252.94 billion by 2034, according to market research firm Precedence Research.\n\n\nCiting successful past efforts such as the restoration of tax concessions for foreign tourist accommodation, medical tourism businesses are seeking to bring back the initiative to cushion the sector from the policy shock.\n“Considering the potential negative impacts of the programme’s abolition, we plan to keep urging the government to reconsider the issue and reinstate the refund system,” an official at Global Tax Free, a VAT refund operator, said.\n