From 1 July 2015, foreign suppliers of e-services to Korean customers must register for and charge value added tax (VAT 10%) on their supplies, including games, music, video, electronic documents or software that are stored on a computer or other electronic device or are accessible through a computer or device in real time without being stored. VAT applies for both B2B and B2C supplies.
There is no registration threshold and suppliers must register within 20 days of the first supply of service (20 July 2015 if already providing services before 1 July). VAT returns must be filed through the Korea National Tax Service (NTS) website and payments must be made through a foreign exchange bank designated by the NTS. There is currently no requirement to appoint a tax agent to handle VAT matters.
An online simplified registration service for business license is expected to be available 10 July 2015, but in the meantime foreign suppliers should register by emailing a basic form to the NTS.
The form is available in the news section of the NTS website (in English).
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