South Korea VAT e-invoice e-Tax – threshold cut July 2023

July 2023 – threshold reduced on reporting of e-invoices

South Korea’s near real-time e-invoicing regime will be made mandatory for a larger group of companies as it cuts the annual reporting threshold from KRW 200m to KRW 100m (approx €74,000).

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 100m from July 2023 (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 10^th 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