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 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
