South Korea
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About
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Regulated by the National Tax Service (NTS) to ensure transparency, enhance tax compliance, and streamline business transactions. Mandatory for VAT-registered businesses, with phased implementation based on annual sales thresholds.
Implementation Timeline
| Date | Phase | Details |
| January 1, 2011 | Introduction of Mandatory E-Invoicing | E-invoicing became mandatory for businesses with annual sales exceeding KRW 3 billion (approximately €2.1 million) |
| January 1, 2014 | Expansion to SMEs | Businesses with annual sales exceeding KRW 300 million (approximately €210,000) were required to adopt e-invoicing |
| January 1, 2022 | Integration with Electronic Tax Invoice System | All VAT-registered businesses, regardless of size, must issue e-invoices through the NTS platform |
Who Needs E-Invoices in South Korea?
- Large Enterprises: Businesses with significant turnover, mandatory since 2011.
- SMEs: Required based on turnover thresholds, phased in by 2014.
- Exporters: Required for cross-border transactions to ensure accurate VAT reporting.
- Non-Resident Businesses: Must issue e-invoices for transactions with South Korean entities if VAT-registered in South Korea.
E-Invoicing vs. E-Billing
| Aspect | E-Invoicing | E-Billing |
| Purpose | Compliance with Spanish and EU regulations | Informal or internal transactions |
| Validation | Real-time via FACe or SII platforms | Not validated |
| Format | Facturae XML | Flexible, non-regulated formats |
| Archiving | Mandatory for six years | Optional |
Key Features of South Korea's E-Invoicing System
- Submission Platforms: Invoices must be submitted via FACe for public sector transactions or SII for VAT reporting.
- Validation: The platform ensures compliance with mandatory fields, digital signatures, and VAT rules.
- Archiving: E-invoices must be stored electronically for 6 years in compliance with Spanish tax laws.
E-Invoicing Dataset
- Buyer/Seller IDs: NIF (Tax Identification Numbers).
- Invoice Details: Invoice number, issue date, and payment terms.
- Goods and Services: Line-item descriptions, quantities, unit prices, and subtotals.
- Taxes: Applicable VAT rates and amounts.
- Transaction Info: Total payable amount, currency, and payment method.
- Delivery Details: Ensures authenticity and integrity of the invoice.
E-Invoicing Across Transaction Types
B2B Transactions- Mandatory for all VAT-registered businesses.
- Real-time e-invoicing ensures compliance, reduces errors, and facilitates VAT refunds for cross-border transactions.
- Not mandatory but encouraged for improved transparency and internal records.
- Required for suppliers to public entities via the NTS platform.
Penalties for Non-Compliance
- Fines: Up to €10,000 per violation for failing to meet public sector requirements.
- Operational Delays: Rejected invoices may lead to payment delays and strained client relationships.
- Legal Risks: Audits and reputational damage for repeated noncompliance.
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