E-Invoice in South Korea

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.