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Laws of the Republic of Korea |
1
VALUE-ADDED TAX ACT
Act No. 2934, Dec. 22, 1976
Amended by Act No. 3016, Dec. 19, 1977
Act No. 3100, Dec. 5, 1978
Act No. 3273, Dec. 13, 1980
Act No. 4023, Dec. 26, 1988
Act No. 4164, Dec. 30, 1989
Act No. 4663, Dec. 31, 1993
Act No. 4743, Mar. 24, 1994
Act No. 4808, Dec. 22, 1994
Act No. 5032, Dec. 29, 1995
Act No. 5374, Aug. 28, 1997
Act No. 5585, Dec. 28, 1998
Act No. 6049, Dec. 28, 1999
Act No. 6136, Jan. 12, 2000
Act No. 6305, Dec. 29, 2000
Act No. 6460, Apr. 7, 2001
Act No. 6539, Dec. 29, 2001
Act No. 6905, May 29, 2003
Act No. 7007, Dec. 30, 2003
Act No. 7318, Dec. 31, 2004
Act No. 7876, Mar. 24, 2006
Act No. 8142, Dec. 30, 2006
Act No. 8826, Dec. 31, 2007
CHAPTER GENERAL PROVISIONS
Article 1 (Taxable Objects)
Article 2 (Person Liable for Tax Payment)
Article 3 (Taxable Period)
Article 4 (Place of Tax Return and Payment)
Article 5 (Registration)
CHAPTER TAXABLE TRANSACTIONS
Article 6 (Supply of Goods)
Article 7 (Supply of Services)
Article 8 (Import of Goods)
Article 9 (Transaction Time)
Article 10 (Transaction Place)
CHAPTER APPLICATION OF ZERO TAX RATE AND TAX EXEMPTION Article 11 (Application of Zero Tax Rate)
VALUE-ADDED TAX ACT
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Article 12 (Tax Exemption)
CHAPTER TAX BASE AND TAX AMOUNT
Article 13 (Tax Base)
Article 14 (Tax Rate)
Article 15 (Collection over Transaction)
Article 16 (Tax Invoice)
Article 17 (Payable Tax Amount)
Article 17-2 (Deduction of Bad Debt Tax Amount)
Article 17-3 (Deduction of Inventory Input Tax Amount) CHAPTER TAX RETURN AND PAYMENT
Article 18 (Scheduled Return and Payment)
Article 19 (Final Tax Return and Payment)
Article 20 (Submission of List of Total Tax Invoices) Article 20-2 (Submission of Income Statement)
CHAPTER DECISION, RECTIFICATION, COLLECTION AND REFUND Article 21 (Decision and Rectification)
Article 22 (Additional Tax)
Article 23 (Collection)
Article 24 (Refund)
CHAPTER SIMPLIFIED TAXATION
Article 25 (Simplified Taxation)
Article 26 (Tax Base and Tax Amount)
Article 26-2 (Addition of Inventory Input Tax Amount) Article 26-3 (Deduction of Fictitious Input Tax Amount) Article 27 (Tax Return and Payment)
Article 28 (Decision, Rectification and Collection) Article 29 (Exemption of Tax Payment Liability)
Article 30 (Waiver of Simplified Taxation)
CHAPTER SUPPLEMENTARY PROVISIONS
Article 31 (Bookkeeping)
Article 32 (Receipt)
Article 32-2 (Deduction of Tax Amount Concomitant with Use of Credit Card) Article 32-3 (Cash Register)
Article 32-4 (Compensation Payment for Credit Card Users) Article 33 (Tax Manager)
Article 34 (Payment by Proxy)
Article 35 (Inquiry and Investigation)
Article 36 (Enforcement Decree)
VALUE-ADDED TAX ACT
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CHAPTER GENERAL PROVISIONS
Article 1 (Taxable Objects)
(1) Value-added taxes shall be imposed on the transactions falling under the following subparagraphs:
1. Supply of goods or services; and
2. Import of goods. (2) The term "goods" in paragraph (1) means all tangible things and in- tangible things which have property value.
(3) The term "services" in paragraph (1) means all services and activities other than goods, which have property value.
(4) The supply of goods or services indispensably annexed to the supply of goods which is the main transaction shall be deemed to be included in such supply of goods, and the supply of goods or services indispensably annexed to the supply of services which is the main transaction shall be deemed to be included in such supply of services. (5) Necessary matters concerning the scope of goods or services as referred to in paragraph (1) shall be prescribed by Presidential Decree. Article 2 (Person Liable for Tax Payment)
(1) A person who independently supplies goods (referring to the goods prescribed in Article 1; hereinafter the same shall apply) or services (referring to the services prescribed in Article 1; hereinafter the same shall apply) on a business basis, regardless of whether it is on a commercial basis or not (hereinafter referred to as the "entrepreneur") shall be liable to pay value-added taxes pursuant to this Act.
(2) A person liable for tax payment under the provisions of paragraph (1) shall include any individual, juristic person (including the State, local governments, and associations established by local governments), unin- corporated association and foundation, and other organizations. Article 3 (Taxable Period)
(1) The taxable period of value-added taxes for entrepreneurs shall be as follows:
First period: from January 1 to June 30; and Second period: from July 1 to December 31.
(2) The initial taxable period for a person starting a new business shall be from the starting date of the business to the closing date of the taxable period in which the starting date of the business is included: Provided, VALUE-ADDED TAX ACT
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That in case where a registration is made under the proviso of Article 5 (1), the said initial taxable period shall be from the date of the registration to the closing date of the taxable period in which such date of registration is included.
(3) When an entrepreneur closes down his business, the taxable period
shall be from the starting date of the taxable period in which
the date
of closing down the business is included to the date of closing down the
business: Provided, That if an entrepreneur does
not start his business
after his registration under the proviso of Article 5 (1), the taxable period
shall be until the date on
which he actually does not start the business.
(4) If any entrepreneur becomes that entrepreneur (hereinafter referred
to as a
"general taxable person") to whom the provisions of Chapter
are not apply by waiving simplified taxation under Article 30 or the
period
from the beginning date of the taxable period in which the date of report
on the waiver of simplified taxation or special
cases of taxation under
Article 30 (1) and (2) is included, to the last day of the month in which
the date of report is included,
and the period from the first day of the
month following the month in which the date of report is included,
to the date on which
the taxable period in which such date of report
is included is terminated, shall be one taxable period, respectively.
Article 4 (Place of Tax Return and Payment)
(1) The value-added tax shall be returned and paid at each business place.
(2) In the event that any entrepreneur has not less than
2 business
places, such entrepreneur may pay the value-added tax in a lump sum
at his principal business place under the conditions
as prescribed by the
Presidential Decree after applying for and obtaining the approval thereof
from the head of tax office having
jurisdiction over his principal business
place under the conditions as prescribed by the Presidential Decree.
(3) Notwithstanding
the provisions of paragraph (1), any entrepreneur
who has 2 or more different places of business may consolidate his tax
returns
for such different places of business to his main office or principal
place of business to file a single tax return and pay the
value-added tax,
if he fully satisfies the following requirements (hereinafter referred to as
the "entrepreneur qualified for consolidated
tax return"), subject to the
approval of the head of the competent tax office as prescribed by the
Presidential Decree. In this
case, his main office or principal place of business
shall be deemed as his single place of business for the purpose of the
VALUE-ADDED
TAX ACT
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application of this Act in connection with the tax return and payment of
the value-added tax: 1. The entrepreneur is required to have the computer
information-processing equipment prescribed by the Presidential
Decree, which
makes it possible for the entrepreneur to control the
flow of logistics and goods in stock at each of his business places; and
2. The entrepreneur is required to apply for and obtain the approval of
his return and payment of the value-added tax in a lump sum
from
the head of tax office having jurisdiction over his main or principal
office under the conditions as prescribed by the Presidential
Decree.
(4) The scope of business places referred to in paragraph (1) shall be
prescribed by the Presidential Decree.
[This Article Wholly Amended by Act No. 7007, Dec. 30, 2003]
Article 5 (Registration)
(1) A person who starts a new business shall register each place of business
with the head of the competent tax office having jurisdiction
over each
place of business if he does not fall within the category of the entrepreneur
qualified for consolidated tax return,
while an entrepreneur qualified for
consolidated tax return shall register his main office or principal place
of business with
the competent tax office, within 20 days after
commencement of his business as prescribed by the Presidential Decree:
Provided,
That a person who intends to start a new business may register
it even before the commencement date of the business.
(2) The head of tax office having jurisdiction over a business place shall,
under the conditions as prescribed by the Presidential
Decree, issue to an
entrepreneur registered under paragraph (1) a registration certificate
with a given registration number (hereinafter
referred to as an
"entrepreneur's registration certificate").
(3) Deleted.
(4) Where an entrepreneur registered under paragraph (1) suspends or
closes down his business or where any other changes in the
registered
matters have occurred, he shall report it without delay to the head of tax
office having jurisdiction over a business
place, as prescribed by the
Presidential Decree. The same shall apply in case where a person who has
registered under the proviso
of paragraph (1) has in fact come not to start
the business.
6
come not to start his business after making the registration under the
proviso of paragraph (1), the head of tax office having jurisdiction
over
a business place shall cancel the relevant registration without delay.
(6) The head of tax office having jurisdiction over a business place may,
if deemed necessary, renew and issue an entrepreneur's
registration certificate
under the conditions as prescribed by the Presidential Decree.
CHAPTER TAXABLE TRANSACTIONS
Article 6 (Supply of Goods)
(1) The supply of goods shall be a delivery or transfer of goods pursuant
to all contractual and legal grounds.
(2) Where an entrepreneur directly uses or consumes for his own business
the goods produced or acquired in connection with his own
business, those
as prescribed by the Presidential Decree shall be considered as the supply
of goods.
(4) The goods (excluding the goods for which the input tax amount is not
deductible pursuant to the provisions of subparagraphs
of Article 17 (2))
left over in stock at the time when an entrepreneur closes down a business
shall be considered as those supplied
to himself. The same shall also apply
where an entrepreneur concludes to not start new business, although he
completed the registration
under the proviso of Article 5 (1).
(5) In selling and buying on consignment or through an agent, the consignor
or the principal shall be considered to have supplied
or received goods directly:
Provided, That this provision shall not apply to cases where the consignor
or the principal is not
identified.
(6) A case that falls under any of the following subparagraphs shall not
be deemed the supply of goods:
1. Offering any goods as security, which is prescribed by the Presidential
VALUE-ADDED TAX ACT
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Decree;
2. Transferring any business, which is prescribed by the Presidential
Decree; and
3. Paying any tax in kind pursuant to the provisions of Acts, which is
prescribed by the Presidential Decree.
(7) Necessary matters pertaining to the supply of goods as prescribed in
paragraph (1) shall be determined by the Presidential Decree.
Article 7 (Supply of Services)
(1) The supply of services shall be either the supply of services or having
others use the goods, facilities or rights, pursuant
to all contractual and legal
grounds.
(2) Where an entrepreneur supplies services directly for his own business,
it shall be considered to have supplied services to himself,
under the
conditions as prescribed by the Presidential Decree.
(3) The supply of services to others without compensation or the
supply
of labor under an employment relationship shall not be considered as the
supply of services.
(4) Necessary matters pertaining to the supply of services as provided
in paragraph (1) shall be determined by the Presidential
Decree.
Article 8 (Import of Goods)
The import of goods shall be an introduction into the Republic of Korea
of goods falling under any of the following subparagraphs
(an introduction
from the bonded area, in the case of goods passing through a bonded
area): Provided, That the case of receiving
from the bonded area the goods
prescribed in subparagraph 2, and which are not yet loaded on vessels
or aircraft, shall be excluded:
1. Goods arriving in the Republic of Korea from a foreign country
(including marine products caught and collected in high seas by
a foreign
vessel); and
2. Goods for which a declaration on export is accepted.
Article 9 (Transaction Time)
(1) The time when the goods are supplied shall be the time as provided
in the following subparagraphs:
1. When the goods are delivered, in case where the moving of goods is
required;
2. When the goods are made available, in case where the moving of goods
is not required; and
3. When the supply of goods is decided, in case where the provisions of
VALUE-ADDED TAX ACT
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subparagraphs 1 and 2 are not applicable.
(2) The time when the services are supplied shall be the time when the
services are supplied or when the goods, facilities or rights
are used.
(3) In the event that any entrepreneur is paid the price for goods or services,
in whole or in part and delivers a tax
invoice provided for in Article 16
or a receipt provided for in Article 32 with respect to such price prior to
the arrival of the
time referred to in paragraph (1) or (2), the time when
such tax invoice and such receipt are delivered shall be deemed the time
when such goods or services are supplied or rendered.
(4) Necessary matters pertaining to the time of supply provided in
paragraphs (1) and (2) shall be determined by the Presidential
Decree.
Article 10 (Transaction Place)
(1) The place of supplying goods shall be those as provided in the following
subparagraphs:
1. The place where the moving of the goods starts, in case where the
moving of goods is required; and
2. The place where the goods are located at the time of supplying the
goods, in case where the moving of goods is not required.
(2) The place of supplying services shall be the place as provided in the
following subparagraphs:
1. The place where either the services are supplied, or the goods, facilities
or rights are used; and
2. The place where passengers are boarded or cargoes are loaded, in case
where the entrepreneur is a nonresident or a foreign juristic
person
in the case of international transportation for which the supply of
services is made at home and abroad.
(3) Necessary matters pertaining to the supply place provided in paragraphs
(1) and (2) shall be prescribed by Presidential Decree.
CHAPTER APPLICATION OF ZERO TAX
RATE AND TAX EXEMPTION
Article 11 (Application of Zero Tax Rate)
(1) The zero tax rate shall apply to the supply of goods or services under
the following subparagraphs: 1. Exported goods;
2. Services supplied overseas;
VALUE-ADDED TAX ACT
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3. International navigation services by ships or aircraft; and
4. Goods or services for earning foreign currency other than those provided
in subparagraphs 1 through 3, which are prescribed by
Presidential
Decree.
(2) In applying the provisions of paragraph (1), the zero tax rate shall,
in case the entrepreneur is a nonresident or a juristic
person of a foreign
country, apply only if a Korean resident or juristic person is identically
exempted from taxes of the foreign
country.
(3) Necessary matters concerning the scope of goods or services provided in
paragraph (1) shall be prescribed by Presidential Decree.
Article 12 (Tax Exemption)
(1) The supply of such goods or services as provided in any of the following
subparagraphs shall be exempted from value-added taxes:
1. Unprocessed foodstuffs (including agriculture, livestock, fishery and
forest products which are served for food), and agriculture,
livestock,
fishery and forest products which are produced in the Republic of
Korea and are not served for food and which are prescribed
by Presidential
Decree;
2. Tap water;
3. Briquettes and anthracite coal;
3-2. Sanitary products for women's period;
4. Medical and health services (including veterinary services) as prescribed
by Presidential Decree, and blood;
5. Educational services as prescribed by Presidential Decree;
6. Passenger transport services: Provided, That passenger transport
services by aircraft, express buses, charter buses, taxis, special
vehicles,
special-type ships or express railroads which are prescribed by
Presidential Decree, shall be excluded;
7. Books (including book loan service), newspapers, magazines, official
gazettes, news agencies as prescribed by the News Agency
Development
Act and broadcasting as prescribed by Presidential Decree: Provided,
That advertisements shall be excluded;
8. Postage stamps (excluding those for collection), revenue stamps, certifi-
VALUE-ADDED TAX ACT
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cate stamps, lottery tickets, and public telephones;
9. Tobacco under Article 2 of the Tobacco Business Act and which falls
under any of the following items:
(a) Tobacco whose selling price under Article 18 (1) of the Tobacco
Business Act is not more than the amount of money as prescribed
by Presidential Decree; and
(b) Tobacco for special use under Article 19 of the Tobacco Business
Act, which is prescribed by Presidential Decree;
10. Financing and insurance services as prescribed by Presidential Decree;
11. Leasing services of residential houses and their appurtenant lands as
prescribed by Presidential Decree;
12. Lands;
13. Manpower services which authors, composers, or other persons as pre-
scribed by Presidential Decree provide vocationally;
14. Creative works of art, artistic events, cultural events, and amateur
athletic games, as prescribed by Presidential Decree;
15. Admission to libraries, science halls, museums, art galleries, zoos,
or botanical gardens;
16. Goods or services which are provided by any organization for religion,
charity, scholarship, relief or other public interests
and which are pre-
scribed Presidential Decree;
17. Goods or services that are prescribed by Presidential Decree and are
provided and rendered by the State, local governments or
associations
established by local governments; and
18. Goods or services which are, without compensation, provided to the
State, local governments, associations established by local
govern-
ments, or organizations for public interests as prescribed by
Presidential Decree.
(2) The import of such goods as provided in any of the following subpara-
graphs shall be exempted from value-added taxes:
1. Unprocessed foodstuffs (including agriculture, livestock, fishery and
forest products which are served for food) as prescribed
by Presidential
Decree;
2. Books, newspapers and magazines as prescribed by Presidential
VALUE-ADDED TAX ACT
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Decree;
3. Goods which are imported by academic research organizations, educa-
tional institutions, the Educational Broadcasting System under
the
Korea Educational Broadcasting System Act, or cultural organizations
for scientific, educational and cultural purposes and
which are prescribed
by Presidential Decree;
4. Goods which any foreign country donates to religion, charity or relief
organizations for the purpose of religious rites, charity,
relief, or
other public interests, and which Presidential Decree prescribes;
5. Goods which any foreign country donates to the State, local governments,
or associations established by local governments;
6. Low-priced and duty-free goods that are received by residents;
7. Goods which are imported as a result of removal, immigration, or in-
heritance, which are exempted from customs or to which simplified
tariff as prescribed in Article 81 (1) of the Customs Act applies;
8. Personal effects, separately delivered baggage, and mailed parcels of
travelers, which are exempted from customs or to which a
simplified
tariff applies;
9. Goods imported as commodity samples or advertising materials, which
are exempted from customs;
10. Goods which are imported, without compensation, for the purpose of
a display in any fair, exhibition, prize contest, film festival
or any
other similar events held in the Republic of Korea, which are exempted
from customs;
11. Goods which are exempted from customs in accordance with treaties,
international laws and rules, or international customs and
which are
prescribed by Presidential Decree;
12. Goods reimported after their export as prescribed by Presidential Decree
from among those with respect to which customs are reduced
or exempted:
Provided, That if reduced, this shall apply only to such reduction;
13. Goods imported temporarily under the conditions of exporting them
again as prescribed by Presidential Decree from among those
with
respect to which customs are reduced or exempted: Provided, That if
reduced, this shall apply only to such reduction;
13-2.
Tobaccos as prescribed in paragraph (1) 9; and
14. Duty-free or duty-reducible goods other than those under subpara-
VALUE-ADDED TAX ACT
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graphs 6 through 13, as prescribed by Presidential Decree: Provided,
That in the case of duty-reducible goods, tax exemption shall
be limited
to that portion for which customs duties are reduced.
(3) The supply of goods or services necessarily auxiliary to the
supply
of goods and services, for which the tax is exempted under paragraph (1)
shall be considered to be included in the supply
of tax-exempt goods or
services.
(4) With respect to the supply of goods and services subject to the application
of the zero tax rate under Article 11 or falling
under paragraph (1) 11,
13, or 16, for which value-added taxes are exempted under paragraph
(1), the entrepreneur may not be exempted
from value-added taxes under
the conditions as prescribed by Presidential Decree.
(5) Necessary matters pertaining to the scope of goods and services pro-
vided in paragraphs (1) and (2) shall be prescribed by
Presidential Decree.
CHAPTER TAX BASE AND TAX AMOUNT
Article 13 (Tax Base)
(1) The tax base for value-added taxes on the supply of goods and services
shall be the total amount of value under the following
subparagraphs
(hereinafter referred to as "value of supply"): Provided, That value-added
taxes shall not be included therein: 1. Where payments are given in money, the payments;
2. Where other payments than money are given, the current market price
of goods and services supplied by the relevant supplier;
3. Where payments for the supply of goods are unjustifiably low or no
payments are made, the current market price of goods supplied
by the
relevant supplier;
3-2. Where payments for the services rendered are unjustifiably low, the
current market price of such services rendered by the relevant
supplier;
and
4. Where the business is closed down, the current market price of inventory
goods.
(2) Amounts under the following subparagraphs shall not be included in
the tax base:
1. The amount of discount;
VALUE-ADDED TAX ACT
13
2. The value of returned goods;
3. The value of goods which are damaged, broken, or lost before they reach
the person receiving the supply;
4. National subsidies and public subsidies;
5. Interest received due to a delay in payments for the supply, among
overdue interests as prescribed by Presidential Decree; and
6. Amount discounted from the value of supply after the goods or services
are supplied, which is prescribed by Presidential Decree.
(3) The bad debt and bounty on the value of supply after the goods and
services are supplied, and other amounts similar to them,
shall not be
deducted from the tax base.
(5) Necessary matters pertaining to the computation of tax base other
than those provided in paragraphs (1) through (4) shall be
prescribed by
Presidential Decree.
The tax rate of value-added taxes shall be 10/100.
[This Article Wholly Amended by Act No. 4023, Dec. 26, 1988]
Article 15 (Collection
over Transaction)
Where an entrepreneur supplies goods and services, the value-added tax-
es, computed by applying the tax rate under Article 14 to
the tax base
under Article 13, shall be collected from the person who receives the relevant
supply.
Article 16 (Tax Invoice)
(1) Where an entrepreneur registered as a person liable for tax payment
supplies goods or services, he shall issue an invoice, stating
matters under
the following subparagraphs (hereinafter referred to as "tax invoice") to
the person who receives the supply, under
the conditions as prescribed
by Presidential Decree, at the time provided in Article 9 (or the time
specified otherwise by Presidential
Decree, if any): Provided, That a tax
invoice may be modified for replacement, as prescribed by Presidential
VALUE-ADDED TAX ACT
14
Decree, if there occurs any event in connection with the descriptions thereof
as prescribed by Presidential Decree including error
and correction:
1. Registration number and name or denomination of the entrepreneur
who supplies;
2. Registration number of the person who receives;
3. The value of supply and the amount of value-added taxes;
4. Date of preparation; and
5. Matters as prescribed by Presidential Decree, other than those under
subparagraphs 1 through 4.
(2) Deleted.
(3) The head of customs house shall deliver to the importer a tax invoice
on goods to be imported under the conditions as prescribed
by Presidential
Decree.
(4) In the case prescribed by Presidential Decree, the provisions of paragraph
(1) may not be applied.
(1) The amount of value-added taxes payable by an entrepreneur
(hereinafter referred to as a "payable tax amount") shall be the
amount
computed by deducting the tax amount under the following subparagraphs
(hereinafter referred to as an "input tax amount")
from the tax amount
on the goods and services supplied by him (hereinafter referred to as
"output tax amount"): Provided, That
where an input tax amount exceeds
the output tax amount, it shall be a refundable tax amount (hereinafter
referred to as a "refundable
tax amount"):
1. The tax amount on the supply of goods and services either used or
to be used for his own business; and
2. The tax amount on the import of goods either used or to be used for
his own business.
(2) An input tax amount under the following subparagraphs shall not be
deducted from the output tax amount:
1998; Act No. 6049, Dec. 28, 1999; Act No. 8826, Dec. 31, 2007>
1. An input tax amount, in case where the list of the total tax invoices
by customer is not submitted under Article 20 (1) and (2),
or the input
tax amount on the portion not entered or entered differently from the
fact, in case where the whole or part of the
registration numbers or
supply values by transaction parties is not entered or entered differently
from the fact from among the
entered items on the submitted list of
the total tax invoices by customer: Provided, That the input tax amount
in such case as
prescribed by Presidential Decree shall be excluded;
1-2. An input tax amount, in case where the tax invoice as provided in
Article
16 (1) and (3) is not delivered, or the whole or part of the
matters to be entered under Article 16 (1) 1 through 4 (hereinafter
referred to as a "requisite entry item") is not entered or entered differ-
ently from the fact on the delivered tax invoice: Provided,
That the
input tax amount in such case as prescribed by Presidential Decree
shall be excluded;
2. An input tax amount on disbursements which are not directly related
to the business;
3. A purchase tax amount on the purchase, lease and maintenance of
non-business small automobiles;
3-2. An input tax amount related to the disbursement of such expenses
as are prescribed by Presidential Decree, which are entertainment
expenses and similar expenditures;
4. An input tax amount related to the business supplying goods or services
which are exempted from the value-added taxes (including
the input
tax amount related to investments), and an input tax amount related
to lands as prescribed by Presidential Decree; and
5. An input tax amount prior to filing a registration under the provisions
of Article 5 (1): Provided, That what is prescribed by
Presidential
Decree shall be excluded.
(3) In the event that the tax is imposed on the supply of goods manufactured
and processed, or of services created, by an entrepreneur
through using,
as raw materials, the agricultural, livestock, fishery or forest products
supplied with the exemption of value-added
taxes (hereinafter referred
to as the "tax-exempt agricultural products, etc.") (excluding a case where
such goods and services
are not exempted from the value-added tax under
Article 12 (4) and are subject to the application of the zero tax rate under
VALUE-ADDED
TAX ACT
16
Article 11), the amount computed under the conditions as prescribed by
Presidential Decree may be deducted as an input tax amount.
(5) Where any goods from which an input tax amount is deducted under
paragraph (1) are used or consumed for the business of supplying
value-added
tax-exempt goods or services, or for any other purposes, the relevant
entrepreneur shall, pursuant to Presidential
Decree, recalculate the pay-
able or refundable tax amount, and make report and payment thereof to
the head of competent tax office,
along with a final return of the taxable
period concerned prescribed in Article 19.
(6) When any goods for which the input tax amount was not deducted
in accordance with paragraph (2) 4 are used or consumed for a
taxable
business, the entrepreneur may deduct an amount calculated by the for-
mula prescribed by Presidential Decree as the input
tax amount for the
taxable period within which the day on which such goods are used or
consumed for the taxable business falls.
(7) Necessary matters pertaining to the scope of the input tax amounts
which are not deducted under the provisions of paragraph
(2) shall be pre-
scribed by Presidential Decree.
Article 17-2 (Deduction of Bad Debt Tax Amount)
(1) In case where an entrepreneur supplies goods or services on which
the taxes are levied, if the whole or part of the credit sales
and other
sales claims (referring to one which includes taxes) on the supply of relevant
goods or services has become a bad debt
and irrecoverable due to a bankruptcy
of or compulsory execution against the person receiving the supply, or by
such other causes
as prescribed by Presidential Decree, the amount com-
puted by the following formula (hereinafter referred to as a "bad debt
VALUE-ADDED
TAX ACT
17
tax amount") may be deducted from the output tax amount for the taxable
period whereto the day when a relevant bad debt becomes
definite belongs:
Provided, That if the entrepreneur recovers the whole or part of the bad
debt amount, a bad debt tax amount related
to the recovered bad debt
amount shall be added to the output tax amount for the taxable period
whereto the date of recovery belongs:
Bad debt tax amount = bad debt amount 10/110.
(2) The provisions of paragraph (1) shall apply only to the case where
the entrepreneur submits the documents attesting the fact
that the bad
debt amount has occurred, along with the report under Article 19, under
the conditions as prescribed by Presidential
Decree.
(3) In application of the provisions of paragraphs (1) and (2), where the
entrepreneur in receipt of the supply of goods
or services has the whole
or part of the bad debt tax amount deducted as an input tax amount
under Article 17, and where the bad
debt of the supplier becomes definite
before the cessation of business by the entrepreneur in receipt of the relevant
supply, the
amount equivalent to the related bad debt tax amount shall
be deducted from an input tax amount for the taxable period whereto the
day when the bad debt becomes definite belongs: Provided, That where
the relevant entrepreneur fails to make such deduction, the
head of a tax
office having jurisdiction over a person who has received the supply shall
correct such failure under the conditions
as prescribed by Presidential
Decree.
(4) Deleted.
(5) Where the relevant entrepreneur who has deducted an input tax amount
(including the correction made by the head of the competent
tax office)
under paragraph (3) refunds the whole or part of the bad debts, a bad
debt tax amount relating to the refunded bad
debts shall be added to an
input tax amount for the taxation period whereto the date of refund
belongs, under the conditions as
prescribed by Presidential Decree.
(6) Matters necessary for the scope of and the procedures for the bad debt
tax amount, other than paragraphs (1) through (3), shall
be prescribed
by Presidential Decree.
18
(1) Where a simplified taxable person as provided in Article 25 is changed
to a general taxable person, an amount calculated according
to what is pre-
scribed by Presidential Decree with respect to the inventory and depreciable
assets at the time of such a change
may be deducted as an input tax
amount.
[This Article Newly Inserted by Act No. 4663, Dec. 31, 1993]
Article 17-4 Deleted.
Article 18 (Scheduled Return and Payment)
(1) An entrepreneur shall return the tax base and the payable or refundable
tax amount for each scheduled return period to the head
of tax office having
jurisdiction over the business place, under the conditions as prescribed by
Presidential Decree, within 25
days (50 days in the case of any foreign
corporation) after termination of the below-mentioned period (hereinafter
referred to
as a "scheduled return period") in each taxable period: Provided,
That the first scheduled return period for a person who starts
or intends
to start a new business shall be from the date of starting the business or
of making the registration under the proviso
of Article 5 (1), to the date
of termination of the scheduled return period whereto the date of such
a registration belongs:
Scheduled return period for the second term: From July 1 to September
30.
(2) Notwithstanding the provisions of paragraph (1), the head of tax
office having jurisdiction over the business place shall,
with respect to any
individual entrepreneur, determine the amount equivalent to half of the
payable tax amount for the immediately
preceding taxable period in each
scheduled return period (if there exists any tax amount which is deducted
VALUE-ADDED TAX ACT
19
or reduced from the tax amount payable under Article 32-2 (1) of this Act
or Articles 104-8 (2), 106-4 (1), and 122-2 of the Restriction
of Special
Taxation Act, it shall be the amount remained after balancing the relevant
tax amount; and if there exists any decision
or rectification under Article
21 of this Act or any decisions on a revised return and a request for rec-
tification under Articles
45 and 45-2 of the Framework Act on National
Taxes, it shall be the amount in which the contents thereof are reflected),
and collect
it within the relevant scheduled return period under the con-
ditions as prescribed by Presidential Decree: Provided, That in the
event
that the collectable amount is less than 100,000 won, such amount shall
not be collected, and any individual entrepreneur
as prescribed by the
Presidential Decree may make a return as provided in paragraph (1).
(4) An entrepreneur shall pay the payable tax amount for the relevant
scheduled return period to the head of tax office having jurisdiction
over
the business place, along with the return under paragraphs (1) and para-
graph (2) (proviso) (hereinafter referred to as a
"scheduled return"),
under the conditions as prescribed by Presidential Decree.
[This Article Wholly Amended by Act No. 4663, Dec. 31, 1993]
Article 19 (Final Tax Return and Payment)
(1) An entrepreneur shall, within 25 days (50 days in the case of any foreign
corporation) after termination of the relevant taxable
period, report the
tax base, the payable or refundable tax amount for each taxable period
to the head of tax office having the
jurisdiction over the business place,
under the conditions as prescribed by Presidential Decree.
20
Decree.
Article 20 (Submission of List of Total Tax Invoices)
(1) Where an entrepreneur has delivered or received tax invoices under
Article
16 (1) and (3), he shall submit a list of the total tax invoices by
customer and that by buyer stating the following matters (hereinafter
referred
to as a "list of the total tax invoices by customer and buyer") along with
the scheduled or final return: Provided, That
in case where the provisions
of the text of Article 18 (2) are applied, it shall be submitted along with
the final return for the
current taxable period: 1. Registration number and name or denomination of the entrepreneur
who supplies or is supplied;
2. Period of transaction;
3. Date of preparation;
4. Total of the supply value and that of the tax amount during such trans-
action period; and
5. Matters other than those provided in subparagraphs 1 through 4,
which are prescribed by Presidential Decree.
(2) Where an entrepreneur who makes a provisional return provided in
the proviso of Article 18 (1) and (2) is unable to submit the
list of total tax
invoice by customer and buyer, together with each provisional return, he
may submit it with the final return
in the taxable period in which the
provisional return period is included.
(3) The head of the customs house who issues tax invoices shall submit
the list of total tax invoice by a customer to the head of
tax office having
jurisdiction over the business place by applying mutatis mutandis the provi-
sions of paragraphs (1) and (2).
(5) Matters other than those as provided in paragraphs (1) through (4),
VALUE-ADDED TAX ACT
21
which are necessary for the preparation and submission of the list of total
tax invoice by customer and buyer, shall be prescribed
by Presidential
Decree.
(1) An entrepreneur who engages in a business enumerated by Presidential
Decree, considering the characteristics of the business
and the management
of tax sources among service businesses, shall submit an income statement
along with the provisional or final
tax return.
(2) Necessary matters concerning the preparation and submission of the
income statement shall be prescribed by Presidential Decree.
[This Article Newly Inserted by Act No. 8142, Dec. 30, 2006]
CHAPTER DECISION, RECTIFICATION,
COLLECTION AND REFUND
Article 21 (Decision and Rectification)
(1) Only where an entrepreneur falls under any of the following subpara-
graphs, the head of tax office or the head of the regional
national tax
office, having jurisdiction over the business place, or the Commissioner
of the National Tax Service, shall decide
or rectify the tax base of value-added
taxes and tax amount payable or tax amount refundable for the taxable
period by investigation:
1. Where the final tax return is not filed;
2. Where there are any mistakes or omissions in details of the final tax
return;
3. Where in filing the final tax return, the list of the total tax invoices
by buyer or customer is not submitted, or the whole or
part of the entries
in such submitted list are not entered or entered differently from the
fact; and
4. In the events other than those provided in subparagraphs 1 through
3, where value-added taxes are likely to be evaded for reasons
as
prescribed by Presidential Decree.
(2) In the event of a decision or rectification of the tax base and payable
tax amount or refundable tax amount for each taxable
period under para-
VALUE-ADDED TAX ACT
22
graph (1) is made, the head of tax office or the head of the regional national
tax office, having jurisdiction over the business
place, or the Commissioner
of the National Tax Service, shall decide or rectify them on the basis of
tax invoices, accounting books,
and any other evidence: Provided, That
in the case falling under any of the following subparagraphs, the estimation
may be made
as prescribed by Presidential Decree: 1. If the tax invoices, accounting books, and any other evidence necessary
for the calculation of the tax base are either missing
or incomplete
in their major portion;
2. If details of the tax invoices, accounting books, and any other evidence
are obviously false in view of the capacity of facilities,
number of employ-
ees, and the current market prices of raw materials, commodities, prod-
ucts, or various charges; and
3. If details of the tax invoices, accounting books, and any other evidence
are obviously false in view of the quantities of raw
materials used,
electric power used, and other operating situations.
(3) Where any mistake or omission is found in the tax base
and payable
tax amount or refundable tax amount that is decided and rectified under
paragraphs (1) and (2), the head of tax office
or the head of the regional
national tax office, having jurisdiction over the business place, or the
Commissioner of the National
Tax Service, shall immediately rectify again
them.
(1) If an entrepreneur falls under any of the following subparagraphs, the
amount indicated in each corresponding subparagraph shall
be added to
the payable tax amount or deducted from the refundable tax amount:
1. An amount equivalent to one percent of the value of supply from the
commencement date of business to the time period for the provisional
tax return within which the day on which the application for registration
is filed falls(or the corresponding taxable period, if
the time period
for the provisional tax return has elapsed), where any entrepreneur
fails to file an application for registration
within the limit time as pre-
scribed in Article 5 (1); and
2. An amount equivalent to one percent of the value of supply from the
VALUE-ADDED TAX ACT
23
commencement date of business to the time period for the provisional
tax return (or the corresponding taxable period, if the time
period for
the provisional tax return has elapsed) during which the day on which
the fact that he has actually engaged in the business
is confirmed,
where it is confirmed that the entrepreneur completed the registration
under the provisions of Article 5 in the name
of another person as
specified by Presidential Decree but has actually engaged in the
business.
(2) Where an entrepreneur falls under any of the following subparagraphs,
the amount equivalent to 1/100 of the value of supply
shall either be added
to the payable tax amount or deducted from the refundable tax amount:
1. If there are requisite entry items omitted partially or completely by
mistake or negligence in a tax invoice issued in accordance
with the
provisions of Article 16 (1), or if there is any description different from
the truth;
2. Deleted; and 3. If he has the input tax amount deducted not by having the credit card
sales slips as provided in Article 32-2 (3) and so on delivered,
and
presenting them to the Government at the time he makes a report as
provided in Article 18 (1) and (2) (proviso) or 19 (1),
but by such
reason as prescribed by Presidential Decree.
(3) If any entrepreneur falls under any of the following subparagraphs,
an amount equivalent to two percent of the value of supply
(or an amount
stated in the tax invoice in the case set forth in subparagraph 2) shall
be added to the tax amount payable or deducted
from the tax amount
refundable:
1. When the entrepreneur has not issued a tax invoice under the provisions
of Article 16 (1);
2. When the entrepreneur delivered a tax invoice under the provisions
of Article 16 (1) without supplying any goods or service; or
2-2. When the entrepreneur was delivered a tax invoice under Article
16 (1) without being supplied with any goods or service;
3. When the entrepreneur supplied any goods or service, but delivered
VALUE-ADDED TAX ACT
24
a tax invoice in any name other than the name of the actual supplier;
and
3-2. When the entrepreneur was supplied with any goods or service, but
was delivered a tax invoice in any name other than the name
of the
actual supplier.
(4) Where an entrepreneur falls under subparagraphs 1 and 2, the amount
equivalent to 1/100 of the supply value of the portion which
is not entered
or entered differently from the fact in the entries of the unsubmitted or
submitted list of the total tax invoice
by buyer, and if he falls under
subparagraph 3, the amount equivalent to 5/1,000 of the supply value
shall be added to the payable
tax amount or deducted from the refundable
tax amount: Provided, That in case where the entries of the list of the
total tax invoice
by buyer are entered by mistake (excluding the case where
it is submitted under Article 20 (2)), and the supply value of the portion
for which the fact of trade is confirmed under the conditions as prescribed
by Presidential Decree shall not apply:
1. Where the list of the total tax invoice by buyer is not submitted under
Article 20 (1) and (2);
2. Where the registration number by each customer, or the whole or part
of the supply value, of the matters to be entered in the
list of the
total tax invoice by buyer submitted under Article 20 (1) and (2), is
not entered, or is entered differently from the
fact; and
3. Where the list of the total tax invoice by buyer is submitted under
Article 20 (2), and it does not fall under subparagraph 2.
(5) In case where an entrepreneur falls under any of the following subpara-
graphs, the amount equivalent to 1/100 of the supply
value corresponding
to the input tax amount deducted not by the list of the total tax invoices
by customer, but by the tax invoices,
or 1/100 of the supply value returned
by entering excessively differently from the fact in the entries of the sub-
mitted list
of the total tax invoices by customer, shall be added to the
payable tax amount, or deducted from the refundable tax amount:
Provided,
That in case where the entries of the list of the total tax invoices
by customer are entered by mistake, and the supply value of
the portion
for which the fact of trade is confirmed under the conditions as prescribed
VALUE-ADDED TAX ACT
25
by Presidential Decree, this shall not be applicable:
1. Where an input tax amount is deducted pursuant to the provisions
of the proviso of Article 17 (2) 1-2 as prescribed by Presidential
Decree;
2. Where the list of the total tax invoices by customer as provided in
Article 20 (1) and (2) is not submitted, or the whole or part
of the
registration numbers by customer or supply values in the entry of the
submitted list of the total tax invoices by customer,
is not entered, or entered
differently from the fact: Provided, That case as prescribed by
Presidential Decree shall be excluded;
and
3. Where the supply value in the entry of the list of the total tax invoice
by customer submitted under Article 20 (1) and (2), which
is entered
excessively differently from the fact, is returned.
(6) If any entrepreneur does not submit the income statement under
the
provisions of Article 20-2 (1) or if the income amount stated in a tax
return is different from the truth, an amount equivalent
to 0.5 percent
of the amount not stated in the tax return or the difference between the
income amount stated in the tax return
and the actual income amount
shall be added to the tax amount payable or deducted from the tax amount
refundable.
26
Article 23 (Collection)
(1) The head of tax office having jurisdiction over the business place shall
collect, according to the examples of the collection
of national taxes, the tax
amount unpaid in case an entrepreneur has paid in short of the reported
payable tax amount in his provisional
tax return or his final tax return,
and the payable tax amount additionally in the case of decision or rectification
made under
the provisions of Article 21 (1) through (3).
(3) The value-added tax on the importation of goods shall be collected
by the head of a customs house according to the examples
of the collection
of customs duties.
Article 24 (Refund)
(1) The head of tax office having jurisdiction over the business place shall
refund, in each taxable period, the refundable tax
amount for the respective
taxable period to the entrepreneur as prescribed by Presidential Decree.
(2) Where an entrepreneur falls under any of the following subparagraphs,
the head of tax office having jurisdiction over the business
place may
refund the refundable tax amount to the entrepreneur under the conditions
as prescribed by Presidential Decree, notwithstanding
the provisions of
paragraph (1): 1. Where the provisions of Article 11 are applicable; and
2. Where the business facilities are newly constructed, acquired, ex-
panded, or extended.
VALUE-ADDED TAX ACT
27
CHAPTER SIMPLIFIED TAXATION
Article 25 (Simplified Taxation)
(1) With respect to any individual entrepreneur (hereinafter referred to
as a "simplified taxable person") whose proceeds (referring
to proceeds
including the value added tax; hereinafter referred to as "proceeds from
supply") from the supply of goods and services
in the immediately preced-
ing calender year fall short of the amount prescribed by Presidential
Decree within the limit of not
less than 48 million won and of not more
than the amount equivalent to 130/100 of such amount, the value added
tax shall be imposed
and collected pursuant to the provisions of this
Chapter, notwithstanding the provisions of Chapters through :
Provided, That
the same shall not apply to the entrepreneur falling under
each of the following items: 1. The entrepreneur who has other business place that is not subject
to the application of the simplified taxation; and
2. The entrepreneur who is prescribed by Presidential Decree taking into
account business type, business size and district, etc.
(2) With respect to any individual entrepreneur who has started a new
business during the immediate preceding year or the immediate
preceding
taxable period, the provisions of paragraph (1) shall apply on the basis
of an amount computed by converting the total
amount of the proceeds
from supply from the starting date of the business to the closing date of
the taxable period in 12 months.
In this case, any fraction of one month
shall be considered as one month.
(3) Any individual entrepreneur who begins a new business shall report
it to the director of tax office having jurisdiction over
the principal business
place, with the registration as provided in Article 5 (1), under the con-
ditions as prescribed by Presidential
Decree, if the total amount of the pro-
ceeds from supply in a calendar year in which the beginning date of the
business is included,
is anticipated to be in short of the amount as provided
in paragraphs (1) and (2).
(4) Any individual entrepreneur who has filed a tax return under the provi-
sions of paragraph (3) shall be made a simplified taxable
person for the
VALUE-ADDED TAX ACT
28
first taxation period: Provided, That the same shall not apply to the case
of any entrepreneurs falling under the proviso to paragraph
(1).
(6) Any individual entrepreneur whose proceeds from supply, which are
decided or rectified under the provisions of Article 28 (1),
exceed the
amount prescribed in paragraph (1) shall be deemed a simplified taxable
person until the taxation period whereto the
day of such decision or such
rectification belongs.
Article 26 (Tax Base and Tax Amount)
(1) With respect to any simplified taxable person, his proceeds from supply
shall be made a tax base.
(2) With respect to any simplified taxable person, an amount calculated
by the following calculation formula shall be made a payable
tax amount.
In this case, where such simplified taxable person runs concurrently two or
more types of businesses, the aggregate
of amounts calculated by each
business type shall be made a payable tax amount:
29
trepreneurs, and files the list of the total tax invoices by customer provided
for in Article 20 (1) or the statement showing the
receipt of credit card sales
slips, etc. prescribed by Presidential Decree with the head of a tax office
having jurisdiction over
his business place as prescribed by Presidential
Decree, the amount calculated under any provision of the following sub-
paragraphs
shall be deducted from the tax amount to be paid for a taxation
period: Provided, That this shall not apply to the input tax amount
under
any of subparagraphs of Article 17 (2):
1. An amount calculated by multiplying an input tax amount entered
in the tax invoices, etc. received during the relevant taxation
period
by the value added ratio of the relevant business type under paragraph
(2);
2. Where any simplified taxable person runs concurrently another busi-
ness type that differs in the value added ratio from the relevant
business
type under paragraph (2), the amount calculated by respectively ap-
plying the value added ratio of the relevant business
type under the
same paragraph to an input tax amount calculated proportionally
under the conditions as prescribed by Presidential
Decree; and
3. Where any simplified taxable person runs concurrently a taxable
business and a tax-free business, the amount calculated under
the
conditions as prescribed by Presidential Decree.
(4) Deleted.
(5) The provisions of Article 13 shall apply mutatis mutandis to the calcu-
lation of a tax base for any simplified taxable person.
30
to be paid for a taxation period prescribed by Presidential Decree shall
be the amount calculated by applying mutatis mutandis the
provisions of
Article 17, notwithstanding the provisions of Article 25 (6). In such case,
the value of supply shall be the amount
obtained by multiplying the proceeds
from supply by 100/110, and in the calculation of an input tax amount,
those resulted after
balancing the tax amount deducted under paragraph
(3) on the received portion of the tax invoices, etc., shall be applied.
Article 26-2 (Addition of Inventory Input Tax Amount)
Where a general taxable person is converted to a simplified taxable
person,
the amount calculated under the conditions as prescribed by
Presidential Decree with respect to the inventory and depreciable assets
(limited to the case of deductions under the provisions of Article 17 (1)
through (3)) at the time of the relevant conversion shall
be added to
the payable tax amount under the provisions of Article 26 (2).
(2) The provisions of paragraph (1) shall be applied only to the cases where
any simplified taxable person submits, under the conditions
as prescribed
by the Presidential Decree, a document attesting the fact that he has received
the supply of tax-free agricultural
products, etc. to the head of a tax office
having jurisdiction over his business place along with a tax return under
the provisions
of Article 27.
[This Article Newly Inserted by Act No. 6049, Dec. 28, 1999]
Article 27 (Tax Return and Payment)
(1) through (4) Deleted
31
(5) Every simplified taxable person shall file a tax return with the head
of a tax office having jurisdiction over the business
place, on the tax
base and the payable tax amount for each taxable period and pay it under
the conditions as prescribed by the
Presidential Decree within 25 days
after the close of relevant taxable period.
(2) Deleted.
(3) With respect to th imposition of additional tax against any simplified
taxable person, the provisions of Article 22 (1) and
(7) shall apply mutatis
mutandis: Provided, That "1/100" referred to in subparagraphs of Article
22 (1) shall be made "5/1,000."
(1) Where the proceeds from supply of a simplified taxable person for the
VALUE-ADDED TAX ACT
32
corresponding taxation period fall short of 12 million won, a liability to pay
the tax amount under the provisions of Article 26
(2) shall be exempted,
notwithstanding the provisions of Article 27: Provided, That the same
shall not apply to any tax amount
that has to be added to the payable
tax amount under Article 26-2.
(3) As to any simplified taxable person who started a new business during
the relevant taxation period, the provisions of paragraph
(1) shall be applied
based on the amount computed by converting the aggregate of proceeds
from supply during the taxation period
beginning on the commencement
date of business to the last day of the taxation period into an aggregate
for six months, while the
same provisions shall, as to any person who
temporarily suspended or permanently closed down his business or any
simplified taxable
person who changed taxable type during the relevant
taxation period, be applied based on the amount computed by converting
the
aggregate of the proceeds from supply during the period beginning on
the first day of the taxation period to the day on which the
business was
temporarily suspended or permanently closed down, or the taxable type
was changed into an aggregate for six months.
In this case, if there is
any fraction of less than one month, it shall be deemed one month.
(4) If it is confirmed that any entrepreneur who is exempted from the
liability for tax payment under the provisions of paragraph
(1) has voluntarily
paid the relevant tax, the head of the competent tax office shall refund
such tax.
(1) Where any simplified taxable person intends to make himself subject
to the application of the provisions for a general taxable
person, he may
be subject to the application of the provisions of Chapters through ,
notwithstanding the provisions of Article
25 (1). In this case, he shall
file a report thereon with the head of the tax office having jurisdiction
over his business place
under the conditions as prescribed by Presidential
VALUE-ADDED TAX ACT
33
Decree not later than the last day of the month preceding the month
in which he intends to be subject to such application.
(2) Deleted.
(3) Deleted.
(4) Any individual entrepreneur who has filed a report pursuant to para-
graph (1) shall keep himself subject to the application
of the provisions
concerning the general taxable person from the first day of the month
wherein he intends to make him subject
to such application to a taxation
period whereto the day coming to fall under the third year belongs.
Article 31 (Bookkeeping)
(1) An entrepreneur shall record all facts of transactions related to his
payable or refundable tax amount in his accounting books,
under the con-
ditions as prescribed by Presidential Decree, and keep them at the place
of business.
(2) In the event that an entrepreneur supplies concurrently any goods
or services exempted from the value-added taxes with the supply
of goods
or services on which the value-added taxes are levied, or he is subject to
the provisions of Article 17 (3), he shall
enter separately in the accounting
books the taxable supply, tax-exempted supply, and the fact that he has
tax-exempt agricultural
products, etc. supplied.
(3) An entrepreneur shall preserve the accounting books kept under paragraphs
(1) and (2) and tax invoices or receipts either issued
or received under
Articles 16 and 32, for five years from the date of filing a final tax return
for the taxable period in which
the facts of said transactions are included.
Article 32 (Receipt)
(1) Notwithstanding the provisions of Article 16 (1), if an entrepreneur
as prescribed by Presidential Decree supplies goods or
services, he shall
VALUE-ADDED TAX ACT
34
deliver a receipt under the conditions as prescribed by Presidential
Decree.
(2) In the case as prescribed by Presidential Decree, the provisions of para-
graph (1) may not be applicable.
(3) Necessary matters for the entry articles, preparation, etc. of the receipt
shall be prescribed by Presidential Decree.
[This Article Newly Inserted by Act No. 4808, Dec. 22, 1994]
Article 32-2 (Deduction of Tax Amount Concomitant with Use of Credit
Card)
(1) Where any entrepreneur (excluding any corporation) as prescribed by
Presidential Decree supplies goods or services on which
value-added taxes
are levied, and issues credit card sales slips under the Specialized Credit
Financial Business Act, cash receipts
under Article 126-3 of the Restriction
of Special Taxation Act or other ones similar thereto as prescribed by
Presidential Decree
(hereafter referred to as a "credit card sales slip, etc."
in this Article) at the time of delivery of the tax invoices as provided
in
Article 16 (1), or where he receives the settlement of prices by electronic
settlement means as prescribed by the Presidential
Decree, the amount
equivalent to 1/100 of the issue amount or the settlement amount (2/100
in case for any simplified taxable person
operating restaurant business
or accommodation business) may be deducted from the payable tax amount.
In this case, when the deducted
amount is in excess of the payable tax
amount prior to the deduction of the relevant amount [referring to the
tax amount that is
obtained by the deduction from or addition to the tax
amount (excluding the additional tax provided for in Article 22 of this
Act
and Articles 47-2 through 47-5 of the Framework Act on National
Taxes) that shall be deducted or added under this Act, the Framework
Act on National Taxes, and the Restriction of Special Taxation Act, and
if the relevant tax amount calculated is minus, such tax
amount shall
be deemed "zero"], the portion of such excess shall be deemed null.
(2) A credit card sales slip, etc. as provided in paragraph (1) shall be
VALUE-ADDED TAX ACT
35
considered as the receipts as provided in Article 32 (1). 1. The statement on the receipts of credit card sales slips, etc. shall be
submitted as prescribed by Presidential Decree; and
2. The credit card sales slips, etc. shall be preserved by applying mutatis
mutandis the provisions of Article 31 (3). In this case,
it shall be deemed
that the evidencing materials have been duly preserved, if those materi-
als have been preserved in accordance
with the method provided for
in Article 160-2 (4) of the Income Tax Act or Article 116 (4) of the
Corporate Tax Act.
(4) The Commissioner of the National Tax Service may, if deemed necessary
for the management of tax payment, designate any entrepreneur
who
mainly supplies consumers who are not entrepreneurs with goods or services
and who is prescribed by Presidential Decree as
a person eligible for joining
a credit card franchise under the Specialized Credit Financial Business
Act or a cash receipt franchise
under Article 126-3 of the Restriction
of Special Taxation Act and urge him to run such franchise.
(1) An entrepreneur as prescribed by Presidential Decree shall install a
cash register, and may issue invoices in which the proceeds
from supply
VALUE-ADDED TAX ACT
36
are recorded.
(3) Where an entrepreneur has issued invoices and kept the respective
audit tapes under paragraph (1), he shall be considered to
have issued
receipts under Article 32 (1) and to have fulfilled the obligations for
bookkeeping under Article 31.
(4) With respect to any person who has installed a cash register under
paragraph (1), value-added taxes may be assessed on the basis
of cash
receipts as prescribed by Presidential Decree.
(5) and (6) Deleted.
(2) Any person who runs the credit card business under the Specialized
Credit Financial Business Act shall, notwithstanding the
provisions of
Article 4 of the Act on Real Name Financial Transactions and Guarantee of
Secrecy and Article 24 of the Use and Protection
of Credit Information
Act, furnish information and data pertaining to the transactions of the
sales slips, etc. necessary for the
lottery under paragraph (1) to the
Commissioner of the National Tax Service under the conditions as prescribed
by the Presidential
Decree.
VALUE-ADDED TAX ACT
37
(4) The extinctive prescription against a right for the compensation money
under paragraph (1) shall be completed unless it is exercised
for three
months from the date of payment, and where such prescription is completed,
the relevant compensation money shall revert
to the National Treasury.
(5) The Act on Special Cases concerning Regulation and Punishment of
Speculative Acts, etc. shall not
apply to the lottery of the sales slips, etc.
and the payment of compensation money under the provisions of paragraph
(1).
(6) In applying the provisions of paragraph (1), the method of lottery,
the amount of compensation and other necessary matters shall
be prescribed
by the Presidential Decree.
[This Article Newly Inserted by Act No. 6049, Dec. 28, 1999]
Article 33 (Tax Manager)
(1) Where an individual entrepreneur falls under any of the following
subparagraphs, a tax manager to take care of filing returns,
payment,
refunds, and any other necessary matters in connection with value-added
taxes shall be designated: 1. Where the entrepreneur does not normally reside in the business place;
and
2. Where he desires to stay abroad for six months or longer.
(2) In any case other than that as provided in paragraph (1), the
entrepreneur
may designate as tax manager any person as prescribed by
the Presidential Decree, to have him manage other necessary matters,
such
as returns, payment, refunds, etc. on the value-added taxes.
(3) The entrepreneur shall, upon designating a tax manager under
paragraphs (1) and (2), report him to the head of tax office having
jurisdiction
over the business place, under the conditions as prescribed by the
Presidential Decree. This provision shall also
apply in case where he changes
the reported matters.
Article 34 (Payment by Proxy)
(1) Any person who receives the supply of services from a person falling
under any of the following subparagraphs (excluding the
case where he
offers the services so furnished to a taxable business) shall collect the
VALUE-ADDED TAX ACT
38
value-added taxes at the time of payment for such services, and pay them
to the head of tax office having jurisdiction over his
business place or the
locality of his residence, under the conditions as prescribed by the
Presidential Decree by applying mutatis
mutandis the provisions of Articles
18 (4) and 19 (2): 1. A nonresident or a foreign corporation that does not have any domestic
business establishment under the provisions of Article
120 of the Income
Tax Act or Article 94 of the Corporate Tax Act (hereafter in this Article
referred to as the "domestic business
establishment"); and
2. A nonresident or a foreign corporation that has the domestic business
establishment (limited to what is prescribed by the Presidential
Decree,
in a case of providing the services with no relations with the domestic
business establishment of the nonresident or foreign
corporation).
(2) Where a person who received the supply of services as provided in
paragraph (1) has not paid the value-added
taxes to the head of tax
office having jurisdiction over the principal business place or locality of
residence under the said paragraph,
the head of tax office having jurisdiction
over the principal business place or locality of residence shall collect the unpaid
tax amount plus an amount equivalent to 10/100 of the said tax amount,
according to the examples of collection of national taxes.
Article 35 (Inquiry and Investigation)
(1) Public officials engaged in the work of value-added taxes may, if it
is necessary for the administrative work on value-added
taxes, make an
inquiry on matters related to value-added taxes to the obligors for tax
payment, persons conducting transactions
with them, trade associations
participated in by the obligors for tax payment, or any other similar
organizations, or investigate
the accounting books, documents, and other
articles.
(2) The head of tax office having jurisdiction over the principal business
place may, for the preservation of payment security for
value-added taxes
or for investigation, order the obligors for tax payment to submit the
accounting books, documents, and any other
articles, and request other
necessary matters.
39
Necessary matters pertaining to the enforcement of this Act shall be
prescribed by the Presidential Decree.
ADDENDA
Article 1 (Enforcement Date)
This Act shall enter into force on July 1, 1977: Provided, That if it is
considered necessary in view of the trends in the economic
conditions, the
enforcement thereof may be postponed as may be prescribed by the
Presidential Decree.
Article 2 Omitted.
Article 3 (General Transitional Measures)
(1) With respect to business tax, commodity tax, textiles tax, petroleum
tax, electricity and gas tax, traffic tax, admission tax,
and entertainment
and food tax assessed or assessable under the previous tax Acts at the
time when this Act enters into force,
they shall be governed by the previous
provisions: Provided, That tax withholding under Article 40 of the previous
Business Tax
Act shall not be conducted after this Act enters into force.
(2) Business tax on business conducted prior to the enforcement of
this
Act shall be imposed as provided in the previous Business Tax Act by
setting a period from the beginning date of the taxable
period under
Article 4 of the previous Business Tax Act to the date before this Act
enters into force as one taxable period.
(3) The payment period for a tax amount notified under Article 31 of the
previous Business Tax Act for the taxable period under
paragraph (2) shall
be prescribed by the Presidential Decree.
Article 4 (Measures on Former Indirect Tax on Inventories)
(1) Any amount of tax replaced by value-added taxes of the amount of
indirect tax under the previous tax Acts included in the value of the
commodities for sale and raw materials for business in stock
at the time
when this Act enters into force, shall be deducted from the amount of
value-added taxes payable under a tax return
filed by the respective
entrepreneur.
(2) The provisions of paragraph (1) shall not apply either to special taxable
persons or to any goods in foreign countries or within
a bonded area.
(3) In the case of paragraph (1), if the value of commodities for sale or
VALUE-ADDED TAX ACT
40
raw materials for business is reported falsely, an amount equivalent to
10/100 of the falsely reported value shall be collected
as an additional tax.
(4) An amount deductible by reporting and the deduction under paragraph
(1) shall be prescribed by the Presidential
Decree.
Article 5 (Measures on Real Estate)
With respect to the real estate acquired before this Act enters into force,
the provisions of Article 6 (2) through (4) shall not
apply: Provided, That
this shall not apply to any increased portion where the value of real estate
has substantially increased
by an expansion or rebuilding after this Act
enters into force.
Article 6 (Measures on Collection in Transaction)
(1) Where a contract is executed before this Act enters into force and the
time
of supply provided in Article 9 (1) and (2) arrives after this Act
enters into force, a person who supplies goods and services shall,
regardless
of the original contract, collect the value-added taxes calculated by applying
the tax rate provided in Article 14 to
the contract amount as a standard
of assessment.
(2) In the case of collecting value-added taxes under paragraph (1). if
commodity tax, textiles tax, or petroleum tax under the
respective former
tax Acts is included in the contract and no special consumption tax is
imposed, the remaining balance, after
the deduction of the respective
previous indirect taxes from the value-added taxes, computed on the
amount remaining after the
deduction of the said taxes from the contract
amount as a tax base, shall be collected.
(3) With respect to special taxable persons, the provisions of paragraphs
(1) and (2) shall not apply.
Article 7 (Measures on Registration)
(1) A person who started his business before this Act enters into force,
shall register as provided in Article 5 not later than
twenty days before
this Act enters into force.
(2) A person who has started business later than twenty days before this
Act enters into force shall register as provided in Article
5 within twenty
days from the starting date of his business.
Article 8 (Transitional Measures on Special Case of Taxation)
(1) During the initial year after this Act enters into force the provisions
of Chapter shall apply to the amount of income provided in the previous
VALUE-ADDED TAX ACT
41
Business Tax Act, by considering it as the proceeds from supply.
(2) Such a person who started business before this Act enters into
force
and falls under a special taxable person under paragraph (1) may file a
report under Article 30 (2) within 10 days after
this Act enters into force.
ADDENDA
(1) (Enforcement Date) This Act shall enter into force on January 1, 1978.
(2) (Examples of Application) This Act shall apply from
that portion of
transactions conducted at the time when and after this Act enters into force:
Provided, That the provisions of
Articles 19 and 27 shall apply to that portion
reported initially after this Act enters into force.
ADDENDA
(1) (Enforcement Date) This Act shall enter into force on the date of its
promulgation.
(2) (Examples of Application) This Act shall apply from that portion of
transactions for the taxable period which initially begins
on January 1, 1979:
Provided, That the provision of Article 22 (4) shall apply from that portion
initially reported in a final
tax return after the application of this Act.
ADDENDA
Article 1 (Enforcement Date)
This Act shall enter into force on January 1, 1981.
Article 2 (Examples of General Application)
This Act shall apply from that portion supplied or supplying initially after
this Act enters into force.
Article 3 (Transitional Measures on Leasing Services of Real Estate)
In the case of leasing real estate for which the lease contract
was made
before this Act enters into force, value-added taxes shall be imposed on
that portion of the lease falling after this
Act enters into force.
Article 4 (Transitional Measures Pursuant to Supply Contract of Goods
for Business)
Where the value-added taxes shall be imposed as a result of this Act
entering into force the supply of value-added tax-exempt lease
of real
estate or passenger transport services before this Act enters into force, if
VALUE-ADDED TAX ACT
42
the person managing the pertinent business (hereinafter referred to as
"entrepreneur converted to a taxable person") entered into
a supply
contract on a deferred payment basis or interim payment basis to supply
goods for business before this Act enters into
force and hereby delivered
(including making available for use; the same shall apply in this Article)
the pertinent goods, it shall
be governed by the previous provisions, and,
if he received a part of the pertinent proceeds but did not deliver the
pertinent
goods before this Act enters into force, the provisions of this
Act shall apply only to that portion of the transaction in which
the time
of supply arrives after this Act enters into force.
Article 5 (Transitional Measures on Tax Base and Time of Supply)
(1) Where an entrepreneur is converted to a taxable person and enters
into a supply contract before this Act enters into force and
becomes eligible
for the value-added taxes as a result of this Act entering into force, and
the amount of the pertinent contract
is not amended to the value of supply
or the proceeds from supply according to agreement of the parties, the
amount of the pertinent
contract shall be considered as the value of supply
or the proceeds from supply.
(2) Where an entrepreneur is converted to a taxable person and enters
into a supply contract before this Act enters into force and
is eligible for
the value-added tax as a result of this Act entering into force, the prices
of goods and services supplied after
this Act enters into force shall be
received or stipulated as receivable before this Act enters into force and
the closing day
of initial provisional tax return period after this Act enters
into force shall be considered as the pertinent time of supply.
Article 6 (Transitional Measures on Business Entity Registration)
(1) An entrepreneur converted to a taxable person shall register
with the
Government at each business place within 20 days from the date of this
Act entering into force under Article 5.
(2) Where an entrepreneur converted to a taxable person has already been
registered, the direct of tax office having jurisdiction
over the principal
business place shall issue the business registration certificate as provided
prescribed in Article 5(2) on the
basis of registered particulars within 10
days following the date of this Act entering into force under the conditions
as prescribed
by the Presidential Decree.
Article 7 (Transitional Measures on Special Taxable Persons)
VALUE-ADDED TAX ACT
43
(1) Where it is not certain whether or not an entrepreneur converted to
a taxable person falls under a special taxable person in
the initial year
after this Act enters into force, the provisions of Article 25 shall apply
to the amount of income under the provisions
of the Income Tax Act by
regarding it as the proceeds from supply.
(2) Where the provisions of Article 27 (1) shall apply to the special taxable
person under the provisions of paragraph (1) for the
initial provisional
tax return period after this Act enters into force, the tax amount payable
for the immediately preceding taxable
period shall be the amount
calculated by applying the tax rate provided in Article 26 (1) to the amount
that the amount of income
provided in paragraph (1) is converted into
the equivalent to six months.
(3) A special taxable person under paragraph (1) may file a report with
the Government under Article 30 (2) within 10 days following
the date
this Act enters into force.
(4) The provisions of the proviso of Article 28 (2) shall apply to that
portion of rectification for the initial starting taxable
period after enters
into force.
(5) The provisions of the proviso of Article 28 (3) shall apply to that
portion of tax return filed initially after this Act enters
into force.
Article 8 (Transitional Measures on Deduction of Input Tax Amount)
The provisions of Article 17 (2) 1 and 3-2 shall
apply to that portion of
the tax amount payable calculated for the initial starting taxable period
after this Act enters into force.
Article 9 (Transitional Measures on to Real Estate)
The provisions of Article 6 (2) through (4) shall not apply to real estate
and special kinds of ships acquired by an entrepreneur who converted
to a taxable person before this Act enters into force: Provided,
That this
shall not apply to the increased portion, where the value of those goods
remarkably increases as a result of capital
expenditure to the pertinent
goods after this Act enters into force.
ADDENDA
Article 1 (Enforcement Date)
This Act shall enter into force on January 1, 1989.
VALUE-ADDED TAX ACT
44
Article 2 (Examples of General Application)
This Act shall apply to the portion which a person supplies or is supplied
with for the first time after this Act enters into force:
Provided, That the
amended provisions of Article 29 (1) shall apply to the portion reported
for the first time after this Act enters
into force.
Article 3 (General Transitional Measures)
The value-added taxes which are imposed or to be imposed at the time
when this Act enters into force shall be subject to the previous
provisions.
ADDENDA
(1) (Enforcement Date) This Act shall enter into force on January 1, 1990.
(2) (Application Examples) The amended provisions of
Article 29 (1) shall
apply to the portion in the taxable period starting for the first time after
this Act enters into force.
ADDENDA
Article 1 (Enforcement Date)
This Act shall enter into force on January 1, 1994: Provided, That the
amended provisions of Articles 20 and 22 (3) shall enter
into force on
July 1, 1994.
Article 2 (Examples of General Application)
This Act shall apply to the portion which a person supplies or is supplied
with for the first time after this Act enters into force:
Provided, That the
amended provisions of Articles 20 and 22 shall apply to the portion reported
for the taxable period beginning
for the first time after this Act enters
into force.
Article 3 (Examples of Application on Tax Base)
The amended provisions of Article 13 (4) shall apply to the portion of
import reported for the first time after this Act enters
into force.
Article 4 (Examples of Application on Deduction of Marginal Tax Amount)
The amended provisions of Article 17 (4) shall
apply to the portion of the
payable tax amount calculated for the taxable period reported, under Article
19, for the first time
after this Act enters into force (including the portion
of the scheduled return period as provided in Article 18).
Article 5 (Examples
of Application to Preliminary Return and Payment)
VALUE-ADDED TAX ACT
45
The amended provisions of Article 18 (2) shall apply to the portion of the
scheduled return period in the taxable period beginning
for the first time
after this Act enters into force.
Article 6 (Transitional Measures concerning Submission, etc. of Tax
Invoice)
In application of the amended provisions of Article 20, if the tax invoices
to be delivered or received at the time of supplying
or receiving goods or
services before July 1, 1994, are submitted to the Government when the
provisional return or final tax return
is made under Article 18 or 19, it
shall be governed by the provisions of the previous Article 20.
Article 7 (Transitional Measures
concerning Additional Tax)
(1) If an entrepreneur fails to submit the tax invoices delivered upon
supplying goods or services before
July 1, 1994, under the previous Article
20 (1), or the requisite entries are not wholly or partly entered in the
submitted tax
invoices, or such entries are different from the fact, the
additional tax shall be imposed under the previous Article 22.
(2) If
an entrepreneur submits under the previous Article 20 (2), a tax
invoice delivered in the event that goods or services are supplied
before
July 1, 1994, the additional tax shall be imposed under the previous
Article 22.
(3) The provisions of paragraphs (1) and (2) shall not apply to the portion
to which the amended provisions of Article 22 (2) are
applied.
ADDENDA
Article 1 (Enforcement Date)
This Act shall enter into force on July 1, 1994.
Articles 2 through 8 Omitted.
ADDENDA
Article 1 (Enforcement Date)
This Act shall enter into force on January 1, 1995.
Article 2 (Examples of General Application)
This Act shall apply to the portion which a person supplies or is supplied
with beginning for the first time after this Act enters
into force.
Article 3 (Application Examples on Additional Tax)
VALUE-ADDED TAX ACT
46
The amended provisions of Article 22 (3) shall apply to the portion returned
for the first time after this Act enters into force.
Article 4 (General Transitional Measures)
Any value-added tax imposed or to be imposed pursuant to the previous
provisions at the time when this Act enters into force, shall
be subject
to the previous provisions.
Article 5 (Transitional Measures concerning Use of Receipt)
Notwithstanding the amended provisions of Article 32, any person who
delivers the receipts under this Act, may deliver a simplified tax invoice
under the previous provisions in lieu of a receipt,
until June 30, 1995,
and in this case, the simplified tax invoice shall be considered as receipt
as provided in this Act.
ADDENDA
This Act shall enter into force on January 1, 1996: Provided, That the
amended provisions of Articles 3, 17-3, 17-4, 18 (2), 25
through 28, and
30 shall enter into force on July 1, 1996.
Article 2 (Examples of General Application)
This Act shall apply to the portion which a person supplies or is supplied
beginning for the first time after this Act enters into
force: Provided,
That the amended provisions of Article 22 (3) and (4) shall apply to the
portion reported for the first time after
this Act enters into force.
Article 3 (Application Examples concerning Scope of Simplified Taxation)
(1) With respect to any individual
general taxable person whose proceeds
from supply of goods or services from January 1 to December 31, 1995
(in case of a person
who has commenced the new business in 1995, the
amount calculated under Article 25 (2)) are under the amount as set
forth by the
amended provisions of Article 25 (1) 1, the provisions
concerning the simplified taxable person shall apply on July 1, 1996,
except
in case where the entrepreneur makes the return to the head of
tax office having jurisdiction over the principal business place
for which
he desires to have them applied, not later than June 20, 1996.
(2) Where an individual entrepreneur who makes the entrepreneur
registration during the first taxable period in 1996, and whose the sum
VALUE-ADDED TAX ACT
47
of proceeds from supply from the date he commences his business, to the
date the first taxable period in 1996 is determined, converted
into twelve
months, is estimated to be short of the amount as set forth by the amended
provisions of Article 25 (1) 1, desires
to have the simplified taxation applied
from the second taxable period in 1996, he shall report the application
of the simplified
taxation to the head of tax office having jurisdiction over
the principal business place, not later than June 20, 1996.
(3) Where
a special taxable person desires to have the provisions concerning
the simplified taxable person applied from the second taxable
period in
1996, he shall report the application as simplified taxable person to the
head of tax office having jurisdiction over
the principal business place,
not later than June 20, 1996.
Article 4 (Application Examples concerning Tax Credit on Tax Invoice, etc.)
(1) The tax credit on tax invoice, etc. as set forth
by the amended provisions
of Article 26 (3), shall be applied only in case where the tax invoices,
the credit card sales slips
as provided in Article 32-2, and the invoices
as provided in the latter sentence of Article 32-2 (3), which are delivered
in connection
with the goods or services supplied after this Act enters into
force.
(2) Notwithstanding the revised provisions of Article 26 (3), with respect
to any entrepreneur the value-added rate of whose business
is not less
than 40/100 under Article 26 (2), and whose tax base is less than fifty
million won in a taxable period, 30/100 of
the imput tax amount specified
in the tax invoice, etc. as to the portion supplied in 1996, and 25/100
as to that in 1997, shall
be deducted from the payable tax amount for
the scheduled return period or the taxable period, respectively.
Article 5 (Application
Examples concerning Non-Collection of Small Sums)
The amended provisions of Article 29 shall begin to apply to the returned
portion
for the taxable period commencing for the first time after this Act
enters into force.
Article 6 (General Transitional Measures)
Any value-added tax levied or to be levied pursuant to the previous
provisions, at the time when this Act enters into force, shall
be governed
by the previous provisions.
Article 7 (Transitional Measures concerning Deduction of Marginal Tax
Amount)
VALUE-ADDED TAX ACT
48
In application of the amended provisions of Article 17-4, any portion
supplying or supplied from January 1, 1996 to June 30, 1996,
shall be
subject to the previous provisions.
ADDENDA
Article 1 (Enforcement Date)
This Act shall enter into force on January 1, 1998.
Articles 2 through 7 Omitted.
ADDENDA
Article 1 (Enforcement Date)
This Act shall enter into force on January 1, 1999.
Article 2 (General Application Examples)
This Act shall apply to goods or services which a person supplies or is
supplied or the import of which is reported initially after
this Act enters
into force: Provided, That the amended provisions of Article 12 (1) 3 shall
apply to services the supply of which
initially commences after this Act
enters into force.
Article 3 (Application Examples concerning Recalculation of Payable Tax
Amount)
The amended provisions of Article 17 (5) shall apply where goods, the
input tax amount of which is deducted, are initially used
or consumed for
a business of supplying value-added tax-exempt goods or services or for
any other purposes after this Act enters
into force.
Article 4 (Application Examples concerning Scheduled Notification)
The amended provisions of Articles 18 (2) and 27
(1) shall apply to tax
amounts which are initially determined or collected after this Act enters
into force.
Article 5 (Transitional Measures concomitant with Conversion of Taxation
on Manpower Services and so on)
If an entrepreneur who conducts a business on which a value-added tax
is imposed under the amended provisions of Article 12 (1)
13 makes a
contract to supply goods for a business before this Act enters into force,
the imposition of a value-added tax on such
goods shall be conformed to
the previous practices with regard to the delivery thereof (including the
goods which are usable; hereinafter
the same shall apply), and this Act
VALUE-ADDED TAX ACT
49
shall apply to goods supplied after this Act enters into force where part
of the proceeds of goods are received but said goods are
not delivered before
this Act enters into force.
ADDENDA
Article 1 (Enforcement Date)
This Act shall enter into force on January 1, 2000: Provided, That the
amended provisions of Articles 3, 17-3, 25, 26, 26-2, 26-3
and 27 (the portion
in which the ratio of proceeds from supply for a scheduled return period
is changed to 1/3 from among the amendments
to the proviso of paragraph
(1) of the same Article shall be excluded) through 30 shall enter into force
on July 1, 2000.
Article 2 (General Application Example)
This Act shall apply starting with the portion of supplying or of being
supplied or of an import declaration filed for the first
time after the
enforcement of this Act.
Article 3 (Application Example concerning Deduction of Tax Amount on
Bad Debts)
(1) The amended provisions of Article 17-2 (3) (proviso) and (4) shall
apply starting with the portion in which a loss from bad
loans is made
definite and then such loss is deducted from the output tax amount for
the first time after the enforcement of this
Act.
(2) The amended provisions of Article 18 (2) and Article 27 (1) (limited
to the portion in which the ratio of the proceeds
from supply for a scheduled
return period is changed to 1/3 from among the amended provisions of the
proviso of paragraph (1) of
the same Article) shall apply starting with
the portion that is decided on and collected for the first time after the
enforcement
of this Act.
Article 4 (Application Example concerning Tax Amount Deduction by Tax
Invoices, etc.)
(1) The amended provisions of Article 26 (3) shall apply starting with
to the portion of any tax invoices, etc. that are furnished
(including the
case in which a list of the total tax invoices by customer is furnished under
Article 20 (1) and (2)) after having
received in relation to goods supplied
or services rendered for the first time after the enforcement of this Act.
(2) In applying
the amended provisions of Article 26 (3), the value added
VALUE-ADDED TAX ACT
50
ratio prescribed by the Presidential Decree shall apply to the portion of
taxation period ranging from July 1, 2000 until December
31, 2003,
notwithstanding the amended provisions of the same paragraph.
Article 5 (Application Example concerning Exemption of
Tax Payment
Liability)
The amended provisions of Article 29 shall apply starting with a tax return
filed for a taxation period that commences for the first
time after the
enforcement of this Act.
Article 6 (Special Case concerning Previous Special Taxable Person)
(1) The provisions concerning the general taxable person shall
apply to
any individual entrepreneur starting on July 1, 2000, who is equivalent
to the simplified taxable person as of June 30,
2000.
(2) The provisions concerning the simplified taxable person shall apply
to any individual entrepreneur starting on July 1,
2000, who is equivalent
to the special taxable person as of June 30, 2000.
(3) The provisions concerning the simplified taxable
person shall,
notwithstanding the provisions of paragraph (1), apply to any previous
simplified taxable person or any previous
general taxable person starting
on July 1, 2000, whose proceeds from supply of goods or services during
the period from January
1, 1999 to December 31, 1999 (in case of a person
who commences a new business in mid-1999, an amount calculated according
to the
provisions of Article 25 (2)) fall short of the amount described in the
provisions of the text of Article 25 (1): Provided, That
any person who
has given up the special case of taxation or the simplified taxation under
the previous provisions and any other
person who runs the business excluded
from the application of the provisions concerning the simplified taxation under
the amended
provisions of Article 25 (1) shall be excluded.
(4) The provisions concerning the general taxable person shall, notwithstanding
the provisions of paragraph (2), apply to any special taxable person starting
on July 1, 2000, whose proceeds from supply of good
and services during
a period from January 1, 1999 to December 31, 1999 (in case of a person
who commences a new business in mid-1999,
an amount calculated according
to the provisions of Article 25 (2)) exceed the amount described in the
provisions of the text of
Article 25 (1).
(5) Any general taxable person who is made subject to the application
of provisions concerning the simplified taxable person under
the provisions
of paragraph (3) by the enforcement of this Act, may be made subject to the
VALUE-ADDED TAX ACT
51
application of provisons concerning the general taxable person even after July
1, 2000, in case where he files a tax return by applying
mutatis mutandis
the previous provisions of Article 30 prior to the enforcement of this Act,
Article 7 (Special Case of Tax Amount
Deduction for Simplified Taxation
Converted to General Taxation)
(1) For any entrepreneur who falls under any of the following subparagraphs
and is subject to the provisions concerning the general
taxable person,
20% of the payable tax amount for the second taxation period of 2000,
and 10% of the payable tax amount for the
first and second taxation periods
of 2001 shall be reduced, respectively: Provided, That the same shall not
apply to the portion
of taxation period not subject to the application of
the provisions concerning the general taxable person:
1. A person who is a simplified taxable person as of June 30, 2000, and
whose proceeds from supply for the immediately preceding
calendar
year (an amount calculated according to the provisions of Article 25
(2) in case of a person who commences a new business
in mid-1999)
fall short of 150 million won, from among those slated to become the
general taxable persons starting from July 1,
2000;
2. A special taxable person whose proceeds from supply of goods or services
from January 1, 1999 to December 31, 1999 (an amount
calculated according
to the provisions of Article 25 (2) in case of a person who commences
a new business in mid-1999) fall short
of 150 million won, and who is
slated to become a general taxable person starting from July 1, 2000;
3. A person whose proceeds converted to the amount for 12 months fall
short of 150 million won, from among the special taxable persons
who
have started a new business during the first taxation period of 2000
and whose aggregate of proceeds from supply for the first
taxation
period of 2000, if converted to the amount for 12 months, exceeds the
amount under the text of Article 25 (1), and who
are to be subject to
the application of provisions concerning the general taxable persons
starting from January 1, 2001;
4. A person who is a general taxable person who commences a new business
during the second taxation period of 2000 and in mid-2001,
and whose
aggregate of proceeds from supply during the taxation period wherein
he has started the new business, if converted to
the amount for 12
months, fall short of 150 million won; and
5. A person whose proceeds from supply for the immediately preceding
VALUE-ADDED TAX ACT
52
calendar year fall short of 150 million won, from among the simplified
taxable persons whose proceeds from supply of goods or services
from
January 1, 2000 to December 31, 2000 (an amount calculated according
to the provisions of Article 25 (2) in case of those
who have started
a new business in mid-2000) exceed the amount under the provisons
of the text of Article 25 (1) and who are to
be subject to the application
of provisions concerning the general taxable persons starting from
July 1, 2001.
(2) With respect to any simplified taxable person under the amended provisions
of Article 25, the payable tax amount may be reduced
according to the
value added ratio prescribed by the Presidential Decree with respect to the
portion of a taxation period ranging
from July 1, 2000 until December 31,
2003.
Article 8 (General Transitional Measures)
Any value added taxes imposed or to be imposed in accordance with the
previous provisions at the time of enforcement of this Act
shall be governed
by the previous provisions.
Article 9 (Transitional Measures concerning Deduction of Inventory
Input Tax Amount)
The previous provisions of Article 17-3 shall apply to the cases of any
special taxable persons under the previous provisions who
are to be altered
to the general taxable persons from July 1, 2000 by the enforcement of
this Act.
Article 10 (Transitional Measures concerning Calculation of Payable Tax
Amount for Immediately Preceding Taxation Period)
In applying
the scheduled notice under the amended provisions of Article 18
(2), the calculation of payable tax amount for the immediately preceding
taxation period with respect to the first scheduled notice to the special
taxable person or the simplified taxable person under
the previous provisions,
who is to be subject to the application of provisions concerning the general
taxable persons starting
from July 1, 2000, shall be governed by the
previous provisions of Article 27 (1).
Article 11 (Transitional Measures concerning Waiver of Simplified
Taxation or Special Case of Taxation)
(1) The previous provisions of Article 30 (4) shall apply to any person
who has become subject to the application of provisions
concerning the
VALUE-ADDED TAX ACT
53
general taxable persons through the waiver of the simplified taxation or
the special case of taxation under the provisions of Article
30 prior to the
enforcement of this Act.
(2) The provisions concerning the general taxable persons shall apply to
any entrepreneur who has become subject to the application
of the simplified
taxation through the waiver of the special case of taxation prior to the
enforcement of this Act and who is to
be subject to the application of provisions
concerning the general taxable persons starting from July 1, 2000 under
the amended
provisions of Article 25 (1), until the period for which he
has to be subject to such application under the previous provision of
Article
30 (4).
ADDENDA
Article 1 (Enforcement Date)
This Act shall enter into force two months after the date of its
promulgation.
Articles 2 through 7 Omitted.
ADDENDA
Article 1 (Enforcement Date)
This Act shall enter into force on January 1, 2001.
Articles 2 through 8 Omitted.
ADDENDA
Article 1 (Enforcement Date)
This Act shall enter into force on July 1, 2001.
Articles 2 through 4 Omitted
ADDENDA
(1) (Enforcement Date) This Act shall enter into force on July 1, 2002.
(2) (Applicable Examples) This Act shall apply to the portion
provided for
the first time after the enforcement of this Act.
(3) (Transitional Measures) With regard to the value-added taxes
to have
been levied or to be levied pursuant to the previous provisions at the time
VALUE-ADDED TAX ACT
54
of enforcement of this Act, the previous provisions shall govern.
ADDENDA
Article 1 (Enforcement Date)
This Act shall enter into force three months after the date of its promulgation.
(Proviso Omitted.)
Articles 2 through 6 Omitted.
ADDENDA
Article 1 (Enforcement Date)
This Act shall enter into force on January 1, 2004: Provided, That the
amended provisions of Article 4 (3) and Article 25 (1) shall
enter force
on January 1, 2005, the amended provisions of Article 12 (1) 3-2 shall
enter into force on April 1, 2004 and the amended
provisions of Article
32-2 (1), (4) and (5) (limited to the matters concerning cash receipts
and cash receipt franchises) shall
enter into force on the date on which
the amended provisions of Article 126-3 of the Restriction of Special Taxation
Act enters
into force.
Article 2 (General Application Example)
This Act shall apply, starting with the portion that first supplies or is
first supplied or the portion on which an import declaration
is first filed
after the enforcement of this Act.
Article 3 (Application Example concerning Time of Transaction)
The amended provisions of Article 9 (3) shall apply, starting with
the
portion on which a tax invoice or a receipt is delivered.
Article 4 (Application Example concerning Return and Payment)
The
amended provisions of Articles 18 (1) and (2) and 19 (1) shall apply,
starting with the portion which is returned and collected
during the taxation
period that commences after the enforcement of this Act.
Article 5 (Application Example concerning Additional
Tax)
The amended provisions of the proviso of Articles 22 and 28 (3) shall apply,
starting with the portion on which the additional
tax is imposed during
the taxation period that commences first after the enforcement of this Act.
Article 6 (Application Example
concerning Simplified Tax Imposition)
(1) The amended provisions of Article 25 (1) shall apply, starting with
the portion to which
the simplified tax imposition is applied during the
VALUE-ADDED TAX ACT
55
taxation period that commences after January 1, 2005.
(2) The amended provisions of the proviso of Article 25 (5) shall apply,
starting with the portion to which the simplified tax imposition is applied
during the taxation period that commences after the
enforcement of this
Act.
Article 7 (Application Example concerning Tax Base and Tax Amount of
Simplified Taxable Persons)
The amended provisions of Article 26 (3) and (6) shall apply, starting
with the portion that is first deducted during the taxation
period that
commences after the enforcement of this Act.
Article 8 (Application Example concerning Return and Payment of
Simplified Taxable Persons)
The amended provisions of Article 27 shall apply, starting with the portion
that is returned or collected during the taxation period
that commences
after the enforcement of this Act.
Article 9 (Application Example concerning Exemption of Tax Payment
Liability)
The amended provisions of Article 29 (1) shall apply, starting with the
portion on which any general taxable person is converted
to a simplified
taxable person during the taxation period that commences after the
enforcement of this Act.
Article 10 (Transitional Measures concerning Exception of Value-Added
Tax for Sanitary Products for Women's Period)
In the event that any entrepreneur who is shifted to an entrepreneur entitled
to the exemption of the value-added tax under the
amended provisions
of Article 12 (1) 3-2 or any entrepreneur whose business is added with
any tax-free business directly uses goods
that he has acquired prior to the
enforcement of this Act for any business that is exempted from the
value-added tax, the provisions
of Articles 6 (2) and 17 (5) shall not apply
thereto.
ADDENDA
(1) (Enforcement Date) This Act shall enter into force on January 1, 2005.
(2) (Application Examples regarding Deduction of Tax
Amount Concomitant
with Use of Credit Card) The amended provisions of Article 32-2 (1) shall
apply to the portion of supplying
or being supplied on or after the date when
this Act enters into force.
VALUE-ADDED TAX ACT
56
ADDENDA
(1) (Enforcement Date) This Act shall enter into force on the date of its
promulgation.
(2) (Application Examples regarding Reports on Waiver of Simplified Taxation)
The amended provisions of the latter part of Article
30 (1) shall apply to the
portion reported on or after the date when this Act enters into force.
ADDENDA