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 (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.
E-invoicing has been mandatory for all corporations since 2011 and for individual taxable persons when exceeding a certain turnover threshold.
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 will be 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.
As countries around the globe digitize their tax systems to close VAT gaps, our experts continually monitor, interpret and codify these changes into our software, reducing the compliance burden on your tax and IT teams.
Discover how the Sovos solution is tailored to manage all e-invoicing and related VAT obligations in South Korea.