Tag Archives: South Korea

South Korea – proposed change to the scope of the supply of electronic services – B2B supplies may be excluded

We reported in our initial post on the South Korean VAT rule changes regarding the supply of electronic services by non-established service providers (effective from 1 July 2015), that the legislation subjected both B2B and B2C supplies to VAT under the new rules. There has been controversy whether the legislation really intended to apply the same treatment to B2B supplies, as to B2C.

The recently submitted Korean tax reform proposal for 2015 brings clarity in this regard by inserting a provision that B2B supplies of electronic services (as defined) will not be subject to the new VAT rules and they remain taxable by Korean business customers under the reverse charge mechanism.

For further details on the above and other proposed tax changes please refer to PwC Korea’s newsletter. Alternatively, please contact Changho Jo of PwC Korea or me.

South Korea – simplified registration website for B2C e-service providers is expected to be available from 10 July

As previously reported here and here the amended South Korean VAT law for the supply of e-services from overseas has been effective since 1 July 2015. Accordingly, overseas service providers shall apply for the simplified business registration by 20 July 2015.

The Korean National Tax Service (“NTS”) recently issued a notification indicating that the website for the application of simplified business registration is still under construction. The website is expected to go-live on 10 July 2015. If a taxpayer would like to apply for the registration earlier than that, it is possible to complete a registration form and submit it via email to the NTS.

For further information please contact Changho Jo of PwC Korea or me.

South Korea – VAT on electronic services provided by foreign entities – changes as of 1 July 2015

Korea joins the group of countries which require non-established companies to register and account for on their B2C sales of electronic service into South Korea.

The VAT law has recently been amended to apply VAT to the supplies of electronic services (e.g. applications, games, music, films, electronic documents, software, etc.) purchased from non-resident service providers (i.e. offshore app developers or through offshore open markets app stores).

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