1. Adjustment of interest rate applied for computing deemed rent for real estate
lease deposits (Article 47 of
the Enforcement Rules of the Act)
○ Interest rate lowered from 1.8 percent to 1.6 percent.
⇒ Applicable to VAT returns filed for the taxable period to which the enforcement
date (Mar. 10, 2017) belongs.
2. Extension of application period for confirmation of transactions for issuance of
self-billed invoice (Article
71-2(2) of the Enforcement Decree of the Act)
○ Application period: Within three months of the date of supply of goods or services
(before revision) → Within
three months of the last day of the taxable period to which
the date of supply of goods or services belongs
(after
revision)
⇒ Applicable to goods or services supplied on or after the enforcement date (Jan. 1,
2017)
3. Change of taxation method for amount settled with mileage or gift certificates
(Article 61 (1) 9, 10 of the
Enforcement Decree of the Act)
○ The amount settled with mileage, etc. for which the business received or will receive
compensation shall be
included in the value of supply. However, the amount settled
with mileage, etc. accumulated from the same
business shall not be included.
- Mileage, etc.: Redeemable bonus points granted in proportion to customers' purchase
amount provided in the
form of mileage points or other similar forms, and gift
certificates granted gratuitously in proportion to
customers' purchase amount and
managed separately from other forms of certificates on the business’s
computerized
system, etc.
- Mileage, etc. accumulated from the same business: Mileage, etc. used to purchase
from the same business that
granted mileage, etc. for purchase of goods or services.
⇒ Applicable to goods and services supplied on or after the enforcement date (Apr. 1,
2017).
4. Expansion of eligibility for deferment of import VAT payment (Article 50-2 of
the Act, Article 91-2 of the
Enforcement Decree of the Act)
○ In addition to small and medium-sized entrepreneurs, entrepreneurs of middle standing
have also become
eligible for deferment of import VAT payment.
- While the import VAT payment deferment scheme was only available to small and
medium-sized entrepre-
neurs with export amount of KRW 10 million or more, eligibility
was widened to include enterprises of
middle standing whose amount of export accounts
for 50 percent or more of total sales.
- Entrepreneurs of middle standing: Enterprises that meet the conditions prescribed by
Article 10 (1) of the
Enforcement Decree of the Restriction of Special Taxation Act
(limited to companies that mainly engage in the
business of manufacturing as
prescribed by Article 6 (2) 2 of the Restriction of Special Taxation Act)
⇒ Applicable to entrepreneurs of middle standing who were granted deferment of import
VAT payment by
filing an application for deferment on or after the enforcement date
(Jan. 1, 2017) and declared import on or
after Apr. 1, 2017.
5. Expansion of eligibility for early VAT refund (Article 59 (2) 3 of the Act,
Article 107 (3), (5), (7) of the
Enforcement Decree of the Act)
○ The scope of entrepreneurs eligible for early VAT refund was widened to include
entrepreneurs carrying
out a financial structure improvement plan.
- Financial structure improvement plan: An engagement, etc. to carry out a corporate
rehabilitation or
improvement plan approved by the court
6. Adjustment of imposition of penalty tax for delayed issuance or non-issuance of
tax invoice (Article 60 (2) 1,
2 of the Act)
○ Application of penalty tax (1 percent of the value of supply) for delayed issuance of
tax invoice
- Issuance within the taxable period concerned (before revision) → Issuance by the ue
date for filing a finalized
return for the taxable period concerned (after revision)
○ Application of penalty tax (2 percent of the value of supply) for non-issuance of tax
invoice
- Failure to issue within the taxable period (before revision) → Failure to issue by
the due date for filing a final-
ized return for the taxable period concerned (after
revision)
⇒ Applicable to goods or services supplied on or after the enforcement date (Jan. 1,
2017)
7. Lowering of penalty tax rate for non-submission or false preparation of tax
invoice (Article 60 (6), (7) of the
Act)
○ Penalty tax rate lowered from 1 percent to 0.5 percent of the value of supply: Penalty
tax for non-submission
or false preparation of list of total tax invoices by
customer, penalty tax for delayed receipt of input tax
invoice, penalty tax for
non-submission or false preparation of list of total tax invoices by seller or
inflation of
value of supply on the list
○ Penalty rate lowered from 0.5 percent to 0.3 percent: Penalty tax for delayed submission
of list of total tax
invoices by customer
⇒ Applicable to goods and services supplied on or after the enforcement date (Jan. 1,
2017)
8. Expiration of exceptions to the imposition of penalty tax for individual
entrepreneurs’ delayed
transmission or non-transmission of electronic tax
invoices (Article 60 (2) 3, 4 of the Act)
○ Where an individual entrepreneur transmits a list of issued electronic tax invoices
between the day following
the next day of electronic tax invoice issuance and the 11 th
day of the month following the end of the
relevant taxable period: Penalty tax of 0.5
percent of the value of supply shall apply instead of 0.1 percent.
○ Where an individual entrepreneur fails to transmit a list of issued electronic tax
invoices by the 11 th day of
the month following the end of the relevant taxable
period: Penalty tax of 1 percent of the value of supply
shall apply instead of 0.3
percent
☞ For more information, please contact the International Tax Resource Management
Office of the National Tax
Service (82-44-204-2888~90).
