The rate
The standard rate in South Korea is 10%. Some goods and services carry reduced or zero rates and others are exempt. The difference matters: zero-rated sales still let you reclaim the tax on your purchases, exempt sales do not.
Who must register
There is no registration threshold: you register, and you charge 10% from the first sale. The line that matters is general against simplified taxpayer. An individual whose previous year's VAT-inclusive turnover was under KRW 104 million is a 간이과세자 — raised from KRW 80 million on 1 July 2024, though property letting and taxable entertainment venues stayed at KRW 48 million. A simplified taxpayer pays 10% on a deemed value-added rate for the sector rather than on the full margin, and under KRW 48 million still files but pays nothing. One under KRW 48 million may not issue tax invoices at all, only receipts, which leaves business customers with no input deduction. Companies are always general taxpayers.
Filing and paying
Registered and filed with National Tax Service (NTS).
Two six-month periods, January to June and July to December, filed and paid on Hometax from the 1st to the 25th of July and of January. Only companies file the quarterly preliminary returns, 1–25 April and 1–25 October; an individual general taxpayer instead gets a 예정고지 for half the previous period's tax, credited against the final return, and none is sent if it would come to under KRW 500,000. A simplified taxpayer files once, 1–25 January for the whole calendar year.
Penalties for getting it wrong
Not filing costs 20% of the tax, 40% if by improper means; under-reporting 10%, again 40% if improper. Late payment runs at 22 per 100,000 of the unpaid tax a day, roughly 8% a year, with a further 3% once the tax has been assessed and is still unpaid.