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South Korea VAT on non-resident digital services

South Korea implemented its 10% Value Added Tax on foreign providers and marketplaces of digital or electronic services to its consumers from 1 July 2015. There is no VAT registration threshold. There is a simplified electronic services registration.

Follow VAT Calc’s global VAT and GST on digital services tracker for live updates on worldwide reforms.

What digital services are liable to South Korean VAT?

Income from the following supplies is subject to Korean VAT:

  • Any services delivered real-time to computers, mobile devices
  • Streaming media
  • Gaming
  • SaaS or cloud-based services
  • Apps
  • Images, sounds (ring tones) and electronic documents
  • Intermediary or brokage services for the above
  • Brokerage services for goods or services consumed in Korea

VAT registration and compliance

There is no non-resident VAT registration threshold in South Korea. Non-residents should apply within 20 days of commencement of sales to South Korea. There is a simplified business registration process available via the Korean National Tax Service’s HOMETAX portal for digital services.

Once registered, returns must be filed on a quarterly basis by the 25th of the following month. The same deadline applies to the payment of any VAT dues.

Sales by non-residents to VAT registered resident businesses do not attract VAT. Instead, the customer should account for the VAT via the reverse charge. If the foreign seller or marketplace only has B2B transactions, then they are not required to VAT register.

From 1 July 2022, non-resident digital services VAT transaction reporting will be imposed. This will require foreign providers and marketplaces to provide within 60 days’ notice full transaction details going back up to five years.

Asia Pacific VAT on digital services

Comments (click for details) Rate Date Threshold Comments
Australia 10% Jul 2017 AUD $75,000
Azerbaijan 12% Jan 2017
Armenia 20% Jan 2022 AMD 115million
Bangladesh 5% - 15% Jul 2019 B2B and B2C
Bhutan 7% Jul 2021 Nu 5million
Cambodia 10% Mar 2022 KHR 250m
China 6%-13% N/a Nil Withholding VAT; B2B and B2C
Fiji 9% TBC FJD 300,000
India 18% Jul 2017 -
Indonesia 11% Aug 2020 IDR600m or 12k customers
Japan 10% Oct 2015 JPY 10 million
Kazakhstan 12% Jan 2022 Nil
Kyrgyzstan 12% Jan 2022 Nil
Laos 7% Feb 2022 LAK 400m
Malaysia 6% Jan 2020 RM500,000
New Zealand 15% Oct 2016 NZD 60,000
Pakistan 2% Sep 2021 Nil Marketplace Withholding VAT
Philippines 12% TBC P 3million
Singapore 7% Jan 2020 S$ 100,000
South Korea 10% Jul 2015 Nil
Taiwan 5% May 2017 NTD 480,000
Tajikistan 18% Jan 2021
Thailand 7% Sep 2021 1.8m Baht
Uzbekistan 15% Jan 2020 Nil
Vietnam 10% Dec 2020

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