VAT Calculator (Korea 10%)
Value Added Tax (VAT) is a tax on the value added at each step of supplying goods and services, and Korea's standard rate is 10%. In practice, almost every point of confusion comes down to two questions: which figure do you apply the 10% to, and how do you pull the tax back out of a price that already includes it? This calculator handles both directions — adding VAT to a net (supply) amount, and splitting a tax-inclusive total into the net amount and the VAT. It is the calculation most often needed by freelancers writing quotes, small business owners recording card receipts, and anyone reconciling figures on a Korean tax invoice.
Key points
- The standard rate is 10%. Net amount × 0.1 = VAT, and net amount + VAT = the total (known in Korean as gongeupdaega). A Korean tax invoice shows all three figures in separate fields.
- To work backwards from a tax-inclusive price, divide by 1.1 — do not subtract 10%. Total ÷ 1.1 = net amount, and total − net amount = VAT. Subtracting 10% from ₩110,000 gives ₩99,000, but the correct net amount is ₩100,000.
- Not every transaction carries 10%. Exports and similar supplies are zero-rated (0%), items such as unprocessed food, medical care and education are exempt, and simplified taxpayers apply an industry value-added ratio that produces a much lower effective rate.
Examples
Net amount of ₩1,000,000 — quoting VAT-exclusive
On a net amount of ₩1,000,000 the VAT is 1,000,000 × 10% = ₩100,000 and the total is ₩1,100,000. The tax invoice records ₩1,000,000 as the supply value and ₩100,000 as the tax amount in separate fields, and the client transfers ₩1,100,000. That ₩100,000 is not revenue — it is output tax you hold temporarily and remit at filing time, so treating the full deposit as income is the classic way to find yourself short of cash when the return is due.
Total of ₩550,000 — extracting VAT from a card receipt
If all you have is a card slip for ₩550,000, the net amount is 550,000 ÷ 1.1 = ₩500,000 and the VAT is ₩50,000. Korean credit card sales slips print the supply value and tax amount separately, so you can check the result against the slip. Splitting the figure lets you book ₩500,000 as an expense and ₩50,000 as input tax, and that ₩50,000 can then be deducted on your VAT return. When the division does not land on a round won, treat the figure printed on the tax invoice as authoritative.
A ₩3,000,000 freelance project — the answer depends on your status
A registered freelancer who quotes ₩3,000,000 'excluding VAT' invoices ₩3,000,000 + ₩300,000 = ₩3,300,000 and issues a tax invoice so the client can reclaim the input tax. If the contract instead says '₩3,000,000 including VAT', the net amount is 3,000,000 ÷ 1.1 ≈ ₩2,727,273 and the VAT is ₩272,727 — roughly ₩273,000 less in actual earnings. Separately, a freelancer working without business registration is typically paid under 3.3% withholding as business income rather than under the VAT system, and issues no tax invoice at all. Writing 'VAT included' or 'VAT excluded' into the quote is the simplest way to avoid the argument later.
Korean business types compared for VAT
| Item | General taxpayer | Simplified taxpayer | VAT-exempt business |
|---|---|---|---|
| Revenue threshold | Prior-year turnover above the simplified-taxpayer threshold, or an excluded industry or location | Individual businesses with prior-year turnover below the threshold (in the low ₩100 million range as of 2026) | No revenue test — applies to businesses supplying only exempt goods and services |
| Rate | 10% (0% on exports and other zero-rated supplies) | 10% multiplied by an industry value-added ratio (roughly 15–40%) | Outside the scope of VAT entirely |
| Tax invoices | Required; electronic issuance is mandatory above a certain size | Required above a set prior-year turnover level; below it, a simple receipt is issued | Issues a plain invoice (gyesanseo), not a tax invoice |
| Input tax deduction | Full deduction of input tax backed by qualifying evidence, except non-deductible categories | Only a small percentage of purchases, so deduction is effectively limited | No deduction — VAT paid becomes part of cost |
| Filings per year | Corporations four times, individuals two final returns (with interim assessments in between) | One return in January; an interim return in July if tax invoices were issued | No VAT return; an annual business status report each February |
As of 2026 · Industry-specific exceptions apply — confirm with Korea's National Tax Service
FAQ
Is the VAT rate always 10%?
Korea's standard VAT rate is 10% and it applies to most domestic transactions. However, exported goods and certain services supplied abroad are zero-rated at 0%, and a list of items is exempt outright — unprocessed foodstuffs, tap water, medical and health services, licensed education services, books and newspapers among them. Simplified taxpayers also multiply the 10% by an industry value-added ratio, producing a far lower effective rate. Whether a specific transaction is taxable, exempt or zero-rated depends on your industry and your counterparty, so confirm borderline cases with the National Tax Service or a licensed tax accountant.
What is the difference between the net amount and the total?
The net amount (supply value) is the price of the goods or services before tax; the total (gongeupdaega) adds the 10% VAT and is what the customer actually pays. A Korean tax invoice records the two in separate fields, and the figure recognised as revenue in your income statement is the net amount. This distinction matters because tax rules that reference turnover — the simplified-taxpayer threshold, the electronic tax invoice mandate — are not all written against the same base, so always check whether a stated threshold is measured on the net supply value or the tax-inclusive total.
When do I need a reverse VAT calculation?
Whenever you know only a tax-inclusive figure — a card statement, a cash receipt, a simple receipt — but your books need the net amount and the input tax recorded separately. Retailers and restaurants that advertise tax-inclusive consumer prices need it to convert sales into supply values, and it comes up whenever a client budgets 'X won including VAT'. The method is to divide the total by 1.1; subtracting 10% from the total is wrong. Multiplying by 10/11 gives the same answer. Rounding to the nearest won can create a one-won discrepancy, so when issuing a tax invoice let the figures on the invoice itself be the final word.
What are the simplified taxpayer rules?
The simplified taxpayer regime reduces the compliance burden on very small individual businesses. Eligibility is based on prior-year turnover falling below a statutory threshold, which sits in the low ₩100 million range as of 2026 — it has been raised several times in recent years and may change again, so verify the current figure with the National Tax Service. Simplified taxpayers compute VAT as 10% multiplied by an industry value-added ratio of roughly 15–40%, which lowers the effective rate but also sharply limits input tax deduction. Below a further, lower turnover level the payment obligation is waived, though the return must still be filed. Corporations cannot use the regime at all, and certain industries such as real estate leasing and entertainment venues are excluded regardless of size.
When are Korean VAT returns filed and paid?
The VAT year is split into two periods: the first covers January to June and the second July to December. Corporate general taxpayers file four times a year counting interim and final returns; individual general taxpayers file two final returns in January and July and normally receive an interim assessment notice based on prior results in between. Simplified taxpayers file once, in January of the following year, although those who issued tax invoices may face an interim July filing. Deadlines generally fall on the 25th of the filing month, and missing them triggers penalties for non-filing and late payment. If a lump-sum payment is difficult, adjustments to interim assessments and deadline extensions can be requested through Hometax.
How do I actually claim input tax back?
VAT you paid on business-related purchases is deductible from your output tax only if it is supported by qualifying evidence and reported on the return. The main qualifying documents are tax invoices, credit card sales slips, and cash receipts issued for business expense purposes. Registering your business cards and cash receipt numbers with Hometax means most of this is aggregated automatically, which is the easiest way to avoid missing deductions. A plain receipt or a bank transfer record may support the expense for income tax purposes but generally will not support an input tax deduction. Some spending is non-deductible even with perfect documentation: business entertainment, purchase and running costs of non-commercial passenger cars, purchases used for exempt activities, and anything unrelated to the business. Where the treatment is unclear, settle it with a tax accountant before filing.
How VAT actually works — who bears the cost
VAT is designed to tax only the value a business itself adds. What you remit is output tax (the VAT you collected on sales) minus input tax (the VAT you paid on purchases). Buy materials for ₩1,100,000 (₩1,000,000 net plus ₩100,000 VAT) and sell for ₩2,200,000 (₩2,000,000 net plus ₩200,000 VAT), and you remit ₩200,000 − ₩100,000 = ₩100,000 — precisely 10% of the ₩1,000,000 of value you added.
Extend that chain across every stage of distribution and the small amounts remitted at each step add up to exactly the VAT embedded in the price the final consumer paid. That is why VAT is classified as an indirect tax: the party legally remitting it (the business) is not the party economically bearing it (the consumer).
The practical consequence is that the VAT arriving in your bank account was never your money. Treat only the amount after dividing the deposit by 1.1 as income and set the remainder aside, and filing season stops being a cash flow event. Many small businesses keep a separate VAT account or move one-eleventh of every incoming payment into it as a matter of routine.
Tax invoices and qualifying evidence in Korea
The tax invoice (segeumgyesanseo) is the core document proving that VAT changed hands between two businesses. The registration numbers of both parties, the issue date, the supply value and the tax amount are mandatory fields, and an error in any of them can jeopardise the deduction. Invoices must in principle be issued at the time the goods or services are supplied; late issuance can attract penalties.
Electronic tax invoices are issued free of charge through Hometax, the National Tax Service's online portal. They are mandatory for all corporations and for individual businesses whose prior-year supply value exceeds a set threshold — a threshold that has been progressively lowered, so check each year whether it now captures you. Issuing electronically transmits the data to the tax authority automatically, which means your sales and purchase records are largely pre-populated at filing time.
Beyond tax invoices, credit card sales slips and business-purpose cash receipts also qualify as evidence supporting an input tax deduction. Exempt transactions, by contrast, use a plain invoice (gyesanseo) which has no tax field at all — and therefore no VAT to reclaim. Mistaking a gyesanseo for a segeumgyesanseo and claiming input tax that never existed is a common and easily avoided error, so read the document title.
Exempt versus zero-rated — both are 0%, so what differs?
Zero-rating and exemption both mean no VAT is charged on the sale, but they diverge completely on whether you can recover the VAT you paid on your own purchases. A zero-rated supply is still a taxable supply, just at a rate of 0%. Because you remain a taxable business, input tax is fully deductible and refundable, so the VAT burden disappears entirely — which is why it is sometimes called full relief. Exported goods and services supplied outside Korea are the typical cases, and export-heavy businesses often receive a refund at every filing.
Exemption instead removes the transaction from the VAT system altogether. You charge no VAT on sales, but you also cannot recover the VAT embedded in your purchases, which simply becomes part of your cost base — partial relief, in other words. Exemption is reserved for basic necessities and socially oriented supplies: unprocessed foodstuffs, medical and health services, licensed education, books and newspapers.
The administrative consequences differ too. A zero-rated business is a taxable business, so it files ordinary VAT returns and issues zero-rated tax invoices. An exempt business files no VAT return but submits an annual business status report each February and issues plain invoices. Businesses that carry on both taxable and exempt activities must apportion shared input tax, typically by revenue ratio, which quickly becomes intricate — if that describes you, involve a tax accountant from the outset.
A VAT filing checklist
Assembling paperwork during filing week is how things get missed. On the sales side, gather the tax invoices and plain invoices you issued, your card sales totals, cash receipts issued, and settlement statements from any platform you sell through — delivery apps, open marketplaces, payment gateways. Platform settlements arrive net of commission, so record gross sales rather than the amount deposited and confirm that the commission is handled separately as a purchase.
On the purchase side, collect the tax invoices you received, business card statements, and business-purpose cash receipts. Registering your business cards and cash receipt numbers with Hometax in advance means most of this is aggregated for you, cutting both omissions and manual entry. Then strip out the categories that cannot be deducted: entertainment expenses, non-commercial passenger vehicle costs, and purchases attributable to exempt activities.
Just before filing, reconcile the sales and purchase totals shown in Hometax against your own books, and check tax invoices for wrong registration numbers or issue dates. Finally, compute the payable amount early enough to have the cash on hand. Filing and payment by the deadline is the rule, and penalties apply when it slips.
This page explains Korean VAT in general terms. How the rules apply depends on your industry and the shape of your transactions, and thresholds and detailed provisions change frequently through tax law amendments. Confirm anything you intend to rely on with the National Tax Service or a licensed tax accountant before filing.
Sources
Related Calculators
Percentage Calculator
Find what percent one value is of another, calculate percentage increase or decrease, and get X% of any number. A free percentage calculator for discounts, raises, and ratios.
Korean Age Calculator
Calculate your international age and Korean year age from your date of birth. This free age calculator follows Korea's 2023 age standardization law and also shows your zodiac sign and days until your next birthday.