South Korea’s developed market economy offers a lower-risk business environment for businesses wishing to enter the Asian market. South Korea introduced the electronic tax invoice (‘e-Tax’) as its invoicing method in 2011. The electronic tax invoice system started in 2011 for every Korean corporation and in 2012 for sole proprietors whose previous year’s sales totaled more than 1 billion KRW (881.7 KUS Dollars). In this regard, since July of 2014, all sole proprietors whose sales exceed 300 million KRW (264.5 K US Dollars) per year must issue their VAT invoices electronically. By the way, implementation of e-invoice in South Korea saves money and time.
However, there are various types of bills used in South Korea under different circumstances.
Some of the invoices that used are:
VAT invoice
Sales invoice
Purchase invoice
Commercial invoice
Credit invoice
On the other hand, businesses registered for VAT must submit their invoices through the National Tax Service (NTS) to tax authorities in one of the following ways:
Invoice uploading via the free portal provided by the tax office
Using an outsourced, licensed e-invoice service provider
Creating your e-invoice through accounting systems with a digital certificate
Using the AVRS phone system
Submit personally to a local tax office
E-Tax Invoice
Businesses that want to issue a tax invoice must first obtain a digital certificate. When issuing e-tax invoice, a tax registration document is required to match invoice with customer. The invoice is sent to the customer by e-mail. At the same time, the e-Tax invoice sends to NTS. However, monthly bulk invoice notification is allowed until the 10th of the following month.
Ultimately, failure to deliver the e-Tax invoice to NTS could result in a fine of 1% of the taxable amount.
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