South Korea introduced its Tax Electronic Invoice System i.e. e-Tax in 2011. This is a mandatory e-invoicing requirement alongside the obligation to report e-tax invoices shortly after issuance. This requirement means South Korea has a Continuous Transaction Controls (CTC) Reporting obligation. The scope of the mandate has been expanded to cover more taxpayers, however the initial workflows and requirements of the mandate have remained relatively stable since 2014.
Currently, e-invoicing is mandatory for all corporations and for individual taxable persons with a turnover of 0.3 billion KRW (approx. $270,K USD) or more.
2011: The electronic issuance of VAT invoices and next day reporting became mandatory for all Korean corporate taxpayers.
2012: In addition to the first category, sole proprietors with a turnover of 1 billion KRW (approx. $ 900,000 USD) and above must issue e-tax invoices.
2014: The threshold was changed from 1 billion KRW (approximately US$900K) to 0.3 billion KRW (approx. $270K USD) and above.
The issuance of an invoice in any other format (e.g. paper) will result in a penalty of 2% of the value of supply.
Failing to transmit the issued invoices to the NTS will result in a penalty of 1%.
If the due date of the reporting to NTS is passed, taxpayers will face a penalty of 0.5% of the value of supply.
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