South Korea: Introduction of Self-Billing Invoices

Carolina Silva
March 7, 2023

South Korea’s latest Tax Reform proposal has recently been approved, and introduces several new measures for the year 2023, among which is the possibility of issuance of self-billing VAT invoices.

The tax reform amended article 71-2 of current South Korean VAT law in order to allow the issuance of invoices for the supply of goods and services by the purchaser, in cases where the supplier is unable to issue said invoices. The purchaser will, therefore, be able to claim deduction for the related input VAT. Issuance of self-billing invoices for VAT exempted supplies of goods and services will not be permitted. Issuance of self-billing invoices by the purchaser is, however, dependent of confirmation from a district tax office.

This amendment will enter into force and apply to all supplies of goods and services starting 1 July 2023.

This South Koran tax reform will result in the expansion of the transactional scope of the country’s e-invoice issuance and CTC reporting system (e-tax invoicing) since the transactions in scope of e-tax invoicing are generally the same as the ones in the scope of VAT invoicing.

Further information on the South Korean CTC e-reporting system can be found here.

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Carolina Silva

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