South Korea E-invoicing

South Korea was one of the first countries to adopt e-invoicing, introducing e-Tax, its Electronic Tax Invoice System, in 2010. E-invoicing in South Korea has been mandatory for all corporations since 2011, and the scope of the mandate has expanded over time.

Bookmark this page to stay up to date with the latest requirements.

1. South Korea e-invoicing requirements

2. Format of electronic tax invoices in South Korea

3. Timeline of e-invoicing adoption in South Korea

4. How Sovos helps with South Korea e-invoicing requirements

5. FAQ

6. Additional resources

South Korea e-invoicing requirements

South Korea’s e-invoicing system consists of two processes: e-invoice issuance and e-invoice transmission. The combination of e-invoice and real-time reporting mandates is relatively unique to South Korea.

Taxpayers must issue e-invoices and exchange with counterparties via email. Following the exchange, e-invoices need to be reported to the National Tax Service (NTS).

South Korea’s NTS requires transmission of e-tax invoices to the government portal within one day of an invoice being issued.

E-invoices must also be issued to the recipient of goods or service subject to VAT via email. Invoices and amended invoices, including credit and debit notes are in scope of the requirements. Currently, e-invoicing in South Korea applies to domestic transactions only.

Penalties are based on failure type (e.g. non-issuance, issuance form, delayed issuance, non-transmission, late transmission etc.) and vary between 0.3-1% of the supply price.

Format of electronic tax invoices in South Korea

Network

NTS Central Platform

Format

XML

eSignature Requirement

E-invoices should be signed using the supplier’s digital signature certificate; only certain types of certificates can be used for this purpose. Taxpayers can use either a certificate issued by the Public Certification Authority or an e-tax certificate issued by the NTS.

Archiving Requirement

Suppliers are required to store invoices for five years, but since e-invoices are stored in the NTS system and accessible to both suppliers and buyers, they are released from this obligation. However, it is recommended to keep copies in case of issues with the NTS system or fiscal disputes with tax authorities.

Timeline of e-invoicing adoption in South Korea

January 2011:Electronic issuance of VAT invoices and next day reporting becomes mandatory for all South Korean corporate taxpayers
January 2012:Mandate now includes entrepreneurs with a supply value of 1 billion KRW and above
July 2014:Threshold for entrepreneurs reduces from 1 billion KRW to 0.3 billion KRW and above
July 2019:Inclusion of tax-free portion of income when calculating the 0.3 billion KRW entrepreneur threshold
July 2022:Entrepreneur threshold adjusts from 0.3 billion KRW to 0.2 billon KRW and above
July 2023:Introduction of self-billing invoices and further entrepreneur threshold reduction from 0.2 billion KRW to 0.1 billon KRW and above
July 2024: The threshold for entrepreneurs to issue e-invoices has been lowered from 0.1 billon KRW to 80 million KRW and above

How Sovos helps with e-invoicing requirements in South Korea

As countries around the globe digitize their tax systems to close VAT gaps, e-invoicing requires a nuanced approach our experts continually monitor, interpret and codify these changes into our software, reducing the compliance burden on your tax and IT teams.

Sovos can be your single-vendor tax compliance partner, helping you handle e-invoicing and related VAT obligations in South Korea and wherever else you do business.