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South Korea VAT e-invoice e-Tax – threshold cut July 2022

Threshold on electronic reporting of e-invoices cut ahead of live reporting

South Korea’s near real-time e-invoicing regime will be made mandatory for a larger group of companies as it cuts the reporting threshold from KRW 300m to KRW 200m from 1 July 2022. Plans for full real-time reporting are also progressing.

South Korea first introduced mandatory real-time electronic tax invoice (e-Tax) requirements in 2011, expanding it to most taxpayers by 2014. This includes pre-clearance of sale invoices with the Korean National Tax Agency (NTA) before issuance to customers.

Check VAT Calc’s global live VAT invoice transaction and e-invoice reporting tracker to see where else real-time submissions of invoices is being implemented. South Korea’s e-Tax model is likely to be copied for 2022 Philippines e-invoicing.

E-invoice requirements

  • Any taxpayer with an annual turnover above KRW 200m from July 2022 (approx €150k; USD 1790k) are subject to the obligation to submit e-invoices for clearance
  • Korea’s e-invoice regime only applies to domestic transactions; cross-border transactions are excluded.
  • Suppliers will require their customers’ tax registration certificate
  • E-invoices should be submitted to e-Tax at the time of supply of the goods or provision of the service. Although if payment happens before this, the e-invoice should be created
  • E-invoices should contain the following information:
    • Tax number and address of the supplier
    • Value of the supply, including VAT
    • Date
    • Customer details
    • Description of the goods (optional)
    • Date of supply (optional)
  • Suppliers must first add a secure digital signature, PKI Public Key Infrastructure, a South Korean public authentication regime to ensure integrity of documents and transactions.
  • The supplier then submits to the e-Tax portal their invoices in XML format (see below)
  • E-invoices may be submitted by the 10th of the month following the time of supply.

Submitting e-invoices to e-Tax

Taxpayers have a number of choices on how to submit their invoices:

  • Free government portal for invoice-by-invoice submissions – eSero
  • AVRS telecommunications system
  • Using adapted accounting or ERP software with PKI digital signature via an API link
  • Engage a licensed third-party e-invoicing agent

Asia Pacific e-invoicing

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