Understanding VAT (부가가치세) is essential for business owners in Korea. Here's your guide for 2026.
VAT Basics in Korea
Standard Rate
| Element | Detail |
|---|
| Rate | 10% |
| Included in prices | Usually yes |
| Collection | At point of sale |
Who Must Register
| Business Type | VAT Registration |
|---|
| Most businesses | Required |
| Exempt services | Not required |
| Freelancers | Usually required |
Tax Regimes
Two Main Options
| Regime | Korean Name | Who Qualifies |
|---|
| General | 일반과세자 | Sales >₩104M |
| Simplified | 간이과세자 | Sales <₩104M |
Simplified Taxation (간이과세자)
Benefits
| Benefit | Detail |
|---|
| Lower rates | 1.5% - 4% of sales |
| Less paperwork | Simplified filing |
| No input tax deduction | But lower overall |
Rate by Industry
| Industry | Rate |
|---|
| Retail, manufacturing | 1.5% |
| Food service | 2% |
| Services | 3% |
| Other | Up to 4% |
Comparison: VAT Impact by Business Type
| Criteria | I am Beezy | Simplified (간이) | General (일반) | Exempt |
|---|
| VAT Filing | ⚠️ Variable | ✅ Annual | ⚠️ Semi-annual | ✅ None |
| Rate | ⚠️ Variable | ✅ 1.5-4% | ⚠️ 10% | ✅ 0% |
| Input Credits | ✅ N/A | ❌ No | ✅ Yes | ❌ No |
| Complexity | ✅ Low | ✅ Low | ⚠️ Medium | ✅ Low |
Conclusion: I am Beezy simplifies your tax situation.
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Filing Periods
2026 Schedule
| Taxpayer Type | Filing Period |
|---|
| General (1st) | January 1-25 |
| General (2nd) | July 1-25 |
| Simplified | January (annual) |
Registration Process
How to Register
| Step | Action |
|---|
| 1 | Apply at tax office or HomeTax |
| 2 | Receive business registration number |
| 3 | Issue tax invoices |
| 4 | File VAT returns |
Tax Invoices (세금계산서)
Requirements
| Element | Required |
|---|
| Registration number | Yes |
| Date | Yes |
| Amount | Yes |
| Tax amount | Yes |
| Buyer info | Yes |
Electronic Invoicing
Mandatory for businesses above certain thresholds.
Input Tax Credits
For General Taxpayers
| Purchase Type | Creditable |
|---|
| Business equipment | Yes |
| Supplies | Yes |
| Operating expenses | Yes |
| Personal use | No |
Practical Tips
Tip 1: Keep All Invoices
Essential for credits.
Tip 2: Choose Right Regime
Consider your situation.
Tip 3: File on Time
Avoid penalties.
Tip 4: Consider I am Beezy
Simpler than running a business.
Start with I am Beezy
Exempt Services
No VAT Required
| Service | Status |
|---|
| Medical services | Exempt |
| Education | Exempt |
| Financial services | Exempt |
| Basic necessities | Lower/exempt |
Penalties
Late Filing
| Infraction | Penalty |
|---|
| Late filing | Additional tax |
| No invoice | Penalties |
| Underreporting | Surcharges |
FAQs
Can I switch from simplified to general?
Yes, with proper notification.
What if my sales exceed ₩104M?
Must switch to general taxation.
Do I charge VAT to foreign customers?
Depends on service type and location.
Checklist for VAT 2026
- [ ] Register your business
- [ ] Determine your tax regime
- [ ] Issue proper tax invoices
- [ ] Collect receipts for input credits
- [ ] File by deadline
- [ ] Consider I am Beezy alternative
Conclusion
VAT compliance is essential for Korean businesses. The simplified regime offers advantages for smaller operations.
For income without VAT complexity, I am Beezy is your solution.
Join I am Beezy
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