South Korea introduced its Electronic Tax Invoice System i.e. e-Tax in 2010. Since 2011, this has become 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 (CTCs) 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.
E-invoicing in South Korea has been mandatory for all corporations since 2011 and for individual taxable persons when exceeding a certain turnover threshold.
E-invoicing in South Korea applies to domestic transactions only. Cross border transactions are out of scope
January 2011: The electronic issuance of VAT invoices and next day reporting became mandatory for all Korean corporate taxpayers
January 2012: : In addition to the first category, sole proprietors with a supply value of 1 billion KRW and above must issue e-tax invoices
July 2014: The threshold changed from 1 billion KRW to 0.3 billion KRW and above
July 2022: The threshold was updated from 0.3 billion KRW to 0.2 billon KRW and above
July 2023: The threshold will be updated from 0.2 billion KRW to 0.1 billon KRW and above
Penalties vary between 0.3-1% of the supply price based on the failure type e.g. non-issuance, issuance form, delayed issuance, non-transmission, late transmission.
Yes, VAT is South Korea’s consumption tax and is charged on virtually everything sold throughout the country.
Yes, e-invoicing in South Korea is mandatory for all corporations and for certain individuals with supplies over a certain amount.
VAT is charged on all supplies of goods and services. There are some exemptions and also zero-rated supplies of goods and services.
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