{"content_id":"ymxk2ecx7p","slug":"2026-vat-changes-korea-business-guide","locale":"en","schema_type":"Article","category":"knowledge_base","category_name":"Knowledge Base","title":"2026 Value-Added Tax (VAT) Changes: Filing, Deduction, and Surtax Guidelines Business Owners Need to Know","summary":"For the 2026 Value-Added Tax (VAT) filing, there are now more items that businesses must verify, including an increase in the surcharge rate for processed tax invoices, the submission of cash sales statements for media content creation businesses, and the submission of evidence regarding businesses operating under a false name. Changes such as the limit on the deemed input tax credit for used cars, changes in the tax treatment of groceries (taxable vs. tax-exempt), and the criteria for simplified taxpayers may also directly affect filing results by industry.","author":{"name":"Injoys Editorial Team","url":"https://injoys.com/ko/about"},"key_points":["When issuing or receiving a fraudulent tax invoice, the surcharge rate has increased from 3% to 4% of the supply value, making it even more important to verify the authenticity of the transaction.","Businesses engaged in media content creation—such as YouTubers and creators—must submit a cash sales statement when filing their value-added tax returns; failure to do so may result in a 1% surcharge on the amount not reported.","Due to stricter enforcement against businesses operating under false names, you must keep records that prove actual business operations, such as lease agreements, utility bills, employment contracts, and photos of the business premises.","Effective July 1, 2026, a cap will be applied to the deemed input tax credit for used cars; any amount exceeding the cap may be carried forward for a one-year deduction, subject to certain requirements.","You should also double-check existing amendments—such as the raised threshold for simplified taxpayers, the extension of the preferential limit on the deemed input tax credit for tax-exempt agricultural products, and the interest rate on deemed rent from lease deposits—before filing your 2026 tax return."],"content_markdown":"## Changes to the 2026 Value-Added Tax Filing at a Glance\n\nBusinesses preparing for the final Value-Added Tax filing in July 2026 should not stop at simply collecting sales and purchase data. Certain industries now have new documents to submit, limits on some deductions have changed, and oversight of fraudulent tax invoices and businesses operating under false names has been strengthened.\n\nSince VAT filing cycles repeat regularly, the process may feel similar each time; however, failing to keep up with these amendments can lead to the following issues:\n\n- You may end up paying more tax by omitting eligible deductions.\n- Incorrect classification of taxable and tax-exempt items may result in an amended return or a tax assessment.\n- Failing to submit required schedules may result in a surcharge.\n- If a business partner’s tax invoice does not match the actual transaction, you may face surcharges or the risk of an audit.\n\nThis article summarizes the Value-Added Tax (VAT) filing requirements for the first half of 2026 and the major changes taking effect in the second half of 2026 from a business practitioner’s perspective. Before actually filing your return, you must confirm with the National Tax Service, HomeTax, your local tax office, or a tax agent whether these changes apply to your specific industry and transaction structure.\n\n## Summary Table of Major Amendments for 2026\n\n| Category | Amendment or Note | Effective/Verification Date | Actions Required by Business Owners |\n|---|---:|---|---|\n| Fictitious Tax Invoices | Surcharge rate for issuing/receiving increased from 3% to 4% | Verify during 2026 filing | Verify the existence of the transaction, contracts, deposit records, and delivery documentation |\n| Media Content Creation Industry | Mandatory submission of cash sales statements | Final tax return for the first half of 2026 | Confirm eligibility (e.g., YouTubers, creators) and submit statements |\n| Management of Businesses Operating Under a Nominee’s Name | Codification of grounds for submitting evidence proving actual business operations | Upon request by the tax office or during tax return review | Retain lease agreements, utility bills, employment contracts, and photos of business premises |\n| Deemed Input Tax Credit for Used Cars | New credit limit established; partial carryover of credit allowed | Effective July 1, 2026 | Calculate credit limit in advance; maintain vehicle registration numbers and VINs |\n| Imported Unprocessed Foodstuffs | Extension of VAT Exemption for Certain Items, Such as Cocoa Beans | Through 2027 | Verify Whether Imported and Distributed Items Qualify for Exemption |\n| Simply Processed Food Products in Bottles or Cans | Transition to Taxable Status After Exemption Expires | Remain Vigilant After 2025 | Classify as Taxable Sales and Reflect in Tax Invoices and Tax Returns |\n| Input Tax Credit for Tax-Exempt Agricultural Products | Extension of Preferential Deduction Limit | Through the end of 2027 | Restaurants and similar businesses should verify whether any deductions were omitted |\n| Deemed Rent from Lease Deposits | Apply an annual fixed deposit interest rate of 2.9% | Report for the applicable tax period | Landlords should recheck the deemed rent calculation formula |\n| Simplified Taxation Threshold | Raised to 104 million won based on the previous year’s supply value | When Verifying Tax Classification | Check tax classification and tax invoice requirements on HomeTax |\n| VAT Refunds for Cosmetic Surgery for Foreign Tourists | VAT refund system to be terminated | Starting in 2026 | Existing refund processing methods will be discontinued |\n\n## Amendments to Check Immediately for the First Half of 2026 Filings\n\n### 1. Increase in Surtax Rates for Issuing or Receiving Fictitious Tax Invoices\n\nTax invoices issued or received without an actual transaction are generally referred to as fictitious tax invoices. According to the 2026 amendments, the surcharge rate for issuing or receiving fictitious tax invoices has been raised from 3% to 4% of the original supply value.\n\nIt is important to note that fictitious tax invoices are not merely a clerical error. Exchanging tax invoices without an actual transaction results in the improper deduction of input tax or the distortion of revenue and expenses. Therefore, the National Tax Service strictly regulates fraudulent tax invoices.\n\nBusinesses are advised to keep the following documents on file for each transaction:\n\n- Contracts, purchase orders, and quotes\n- Tax invoices and transaction statements\n- Bank transfer records and credit card payment records\n- Delivery notes, inspection certificates, and waybills\n- Deliverables, emails, and work reports\n- Business registration status and actual contact information of business partners\n\nIn particular, for tax invoices used to claim input tax credits, simply having the invoice is not sufficient. You must also verify whether the goods or services were actually supplied, whether the amount and supply date match, and whether the business partner is a legitimate business entity.\n\n### 2. Submission of Cash Sales Statements for Media Content Creators (e.g., YouTubers and Creators)\n\nStarting with the first half of 2026’s Value-Added Tax (VAT) filing, businesses engaged in media content creation—such as YouTubers and creators—must verify whether they are required to submit cash sales statements. If they are required to submit a cash sales statement but fail to do so, a surcharge equivalent to 1% of the non-submitted amount may be imposed.\n\nMedia content creators have diverse revenue streams.\n\n- Platform advertising revenue\n- Donations, membership fees, and similar forms of support such as “Star Balloons” and “Super Chat”\n- Production fees for sponsored or advertising content\n- Sales of courses, e-books, and merchandise\n- Settlements from overseas platforms\n- Individual service fees received in cash or via bank transfer\n\nDepending on the transaction structure, it may vary which of these amounts constitute taxable revenue, whether a zero-rate or foreign transaction review is required, and whether the business is subject to the cash sales statement filing requirement. Even if you entrust your tax filing to a tax agent, you must inform them in advance that you have “income from media content creation” and provide settlement data for each platform.\n\nBusiness owners filing their own returns must ensure they do not omit the option to attach or enter a cash sales statement on the HomeTax filing screen.\n\n### 3. Strengthened Crackdown on Front Companies and Management of Supporting Documentation\n\nA “front company” refers to a business registered under the name of someone other than the actual business operator, or a situation where the nominal business owner and the actual operator are different. Such structures can lead to the issuance of fraudulent tax invoices, tax evasion, and income concealment, posing significant tax risks.\n\nWith the 2026 amendments to the Value-Added Tax Act, the requirement to submit documentation proving the actual status of business operations has been codified. Since the head of the competent tax office may request the submission of supporting documents when verifying the existence of a business premises or whether the business is actually in operation, it is prudent for even legitimate businesses to keep the necessary documentation on hand.\n\nExamples of acceptable supporting documents are as follows.\n\n| Document | Information Verified |\n|---|---|\n| Lease Agreement | Business location and right of use |\n| Utility bills (electricity, water, gas) and other service charges | Actual use of the business premises |\n| Employment Contracts | Hired staff and operational substance |\n| Photos of the business premises (interior and exterior) | Signage, equipment, inventory, office space, etc. |\n| Contracts and purchase orders with business partners | Evidence of actual business operations |\n| Records of sales and purchase payments | Use of a business-registered bank account and transaction flow |\n\nIf you are operating your business properly, there is no need to worry excessively. However, if your business registration address differs from your actual place of business, if the business is registered under the name of a family member or acquaintance, or if the account holder’s name differs from the business owner’s, it is advisable to resolve these issues in advance.\n\n## Effective July 1, 2026: Limit on Deemed Input Tax Credit for Used Cars\n\nThere is also an important change for businesses that buy and sell used cars, such as used car dealerships. Starting July 1, 2026, a limit will be imposed on the deemed input tax credit for used cars.\n\nPreviously, if certain requirements were met, 10/110 of the acquisition cost could be claimed as a deemed input tax credit; however, following the amendment, the credit will be applied up to the limit of “sales revenue minus the amount of purchases documented by tax invoices.”\n\n### Practical Considerations\n\n- The acquisition cost and sales price for each vehicle must be tracked separately.\n- Purchases for which tax invoices were received must be separated from purchases eligible for the deemed input tax credit.\n- For amounts that cannot be deducted due to exceeding the limit, verify whether they can be carried forward for deduction within one year.\n- Since vehicle registration numbers and VINs must be submitted when applying for the deduction, do not omit vehicle-specific identification information.\n\nUsed car dealers are advised to calculate the eligible deduction amount in advance for transactions in the second half of the year. Since amounts exceeding the deduction limit may occur, it is practically safer to create monthly or vehicle-specific tracking sheets and review them with a tax agent.\n\n## Items from Past Amendments That Require Continued Attention in 2026\n\n### 1. Extension of VAT Exemption for Imported Unprocessed Foodstuffs Such as Cocoa Beans\n\nThe value-added tax (VAT) exemption for certain imported unprocessed foodstuffs, such as cocoa beans, cocoa shells, and cocoa husks, has been extended through 2027. Businesses that import or distribute these items must verify their product classification and transaction type to ensure they remain eligible for the VAT exemption through 2027, just as before.\n\nIt is difficult to determine whether imported food items are taxable or tax-exempt based solely on their names. Since the determination may vary depending on the actual items declared to customs, the degree of processing, the type of packaging, and the method of domestic sale, it is advisable to keep the import declaration certificate and product classification documents on file together.\n\n### 2. Transition to Taxation for Simply Processed Food Products Packaged in Bottles or Cans\n\nCertain simply processed food products packaged in bottles or cans were previously exempt from value-added tax (VAT), but have become subject to taxation following the expiration of the exemption period. Examples include soy sauce, soybean paste, chili paste, kimchi, fermented seafood, tofu, pickled vegetables, and blanched vegetables.\n\nBusinesses selling these items must verify the following:\n\n- Taxable/exempt classification by product in POS systems or online stores\n- Taxable/exempt classification when issuing tax invoices or cash receipts\n- Taxable/exempt classification in purchase records\n- Whether the taxable base is reflected in the VAT return\n\nIf these items are still being treated as tax-exempt, it could result in the omission of taxable sales; therefore, you must immediately review your product master data and accounting standards.\n\n### 3. Extension of the Preferential Limit for Deemed Input Tax Credit on Tax-Exempt Agricultural Products\n\nBusinesses that purchase tax-exempt agricultural products to supply taxable goods or services may receive a deemed input tax credit under certain conditions. Industries such as restaurants and food manufacturing are significantly affected by this system.\n\nThe preferential deduction limit has been extended through the end of 2027, allowing both sole proprietors and corporate businesses to benefit from a limit more favorable than the standard limit.\n\n| Business Type | Standard Deduction Limit | Preferential Deduction Limit |\n|---|---:|---:|\n| Sole Proprietor | 40–50% | 55–75% |\n| Corporation | 30% | 50% |\n\nFor the deemed input tax credit on tax-exempt agricultural products, supporting documentation—such as invoices by supplier, credit card sales slips, and cash receipts—is essential. Businesses with a high proportion of agricultural product purchases should verify that no invoices are missing before filing their tax return.\n\n### 4. Interest Rate for Deemed Rent on Lease Deposits: 2.9% per annum\n\nReal estate landlords may need to calculate deemed rental income based on security deposits. The fixed-term deposit interest rate to be applied for the 2026 tax return is set at 2.9% per annum.\n\nDeemed rental income is a system that includes the amount equivalent to the investment income from the security deposit in the taxable base, even if no actual monthly rent was received. Applying the interest rate incorrectly can result in underreporting or overreporting; therefore, you must verify the security deposit amount, lease term, taxable floor area, and fixed-term deposit interest rate specified in the lease agreement.\n\n### 5. Threshold for Simplified Taxpayers Raised\n\nThe threshold for simplified taxation—based on the total supply value from the previous year—has been raised from 80 million won to 104 million won. Consequently, small-scale business operators who were previously close to qualifying as general taxpayers under the old criteria may now be classified as simplified taxpayers under the new standards.\n\nAlthough the tax burden and filing methods for simplified taxpayers differ from those of general taxpayers, it cannot be said that they are simply advantageous in every respect. In particular, you must review the obligation to issue tax invoices, the method of input tax credit, whether business partners can claim input tax credits, and the value-added rates by industry.\n\nThe items to check are as follows:\n\n- Check your current tax classification on HomeTax\n- Check the total supply value for the previous year\n- Check whether your business falls under industries or regions excluded from the simplified tax system\n- Check whether you are required to issue tax invoices\n- Check whether your business partners typically require tax invoices\n\n### 6. End of VAT Refunds for Cosmetic and Plastic Surgery Services for Foreign Tourists\n\nThe value-added tax (VAT) refund system for cosmetic and plastic surgery services provided to foreign tourists was discontinued as of 2026. Medical institutions and related businesses must take care not to file reports or provide guidance based on the previous refund system.\n\nAny internal guidelines, payment systems, refund processing procedures, or foreign-language information pages that were created under the previous system must be updated. Incorrect refund processing may result in future tax assessments or customer complaints.\n\n## Checklists by Industry\n\n### Restaurants, Cafes, and Food Manufacturing\n\n- Verify that you have collected all documentation for the purchase of tax-exempt agricultural products.\n- Review whether you are eligible to apply the preferential limit for deemed input tax credits.\n- If you sell simple-processed food products packaged in bottles or cans, verify whether they are subject to taxation.\n- Check that the taxable and tax-exempt codes for each item in your POS system are up to date.\n\n### YouTubers, Creators, and Content Providers\n\n- Verify whether your business qualifies as a media content creation business.\n- Compare settlement data from each platform with your bank deposit records.\n- Ensure you do not omit any amounts subject to the cash sales statement requirement.\n- Revenue from overseas platforms may require review for taxation, the zero-rate, or foreign transactions, depending on the transaction structure.\n\n### Used Car Sales\n\n- Calculate the deemed input tax credit limit for transactions occurring on or after July 1, 2026.\n- Maintain records of vehicle registration numbers and VINs for each vehicle.\n- Review whether amounts exceeding the limit can be carried forward for deduction.\n- Separate the amounts on tax invoices from purchases eligible for the deemed input tax credit.\n\n### Real Estate Leasing Business\n\n- Verify whether lease deposits are subject to the deemed rental income calculation.\n- Verify that the annual interest rate of 2.9% for time deposits has been applied.\n- Organize lease agreements, records of security deposit changes, and monthly rent collection records.\n- If operating both taxable and tax-exempt leases, verify the apportionment of common input tax.\n\n### Import and Distribution Business\n\n- Verify whether imported unprocessed foodstuffs, such as cocoa beans, are eligible for an extension of tax exemption.\n- Retain import declaration certificates and commodity classification documents.\n- Review whether the distinction between taxable and tax-exempt goods changes at the domestic sales stage.\n- Verify that the correct type of tax invoice or sales receipt is issued to business partners.\n\n## Documents Business Owners Should Prepare Before Filing\n\nMost VAT filing errors result from missing documents, incorrect classification of taxable versus tax-exempt items, or discrepancies in tax invoices. It is recommended to prepare at least the following documents before filing.\n\n| Document | Reason for Requirement |\n|---|---|\n| Sales Tax Invoices and Receipts | Verify taxable and tax-exempt sales |\n| Purchase Tax Invoices and Receipts | Review input tax credits and deemed input tax credits |\n| Credit Card Sales and Cash Receipt Data | To prevent omission of reported sales |\n| Online Platform Settlement Data | To verify sales from delivery apps, online shopping malls, and content platforms |\n| Bank Account Transaction History | To reconcile cash sales with actual amounts received |\n| Lease Agreements | To verify the existence of business premises and deemed rental income from leasing activities |\n| Utility and Management Fee Statements | Proving Business Premises Operation |\n| Vehicle Purchase and Sale Records | Calculating the Deduction Limit for Used Cars |\n| Import Declaration Certificate | Determining Taxable vs. Tax-Exempt Imported Items |\n\n## Practical Guidelines for Reducing Filing Errors\n\n1. First, check the revised regulations for your specific industry. The same rules do not apply to all businesses.\n2. Compare the amounts on tax invoices with your actual deposit and withdrawal records.\n3. Distinguish between taxable sales, tax-exempt sales, and sales subject to the zero-rated tax.\n4. Verify whether any supporting statements need to be submitted.\n5. Check not only whether a deduction is available but also the limit and supporting documentation requirements.\n6. Verify the facts regarding tax invoices from suspicious business partners before filing.\n7. Retain contracts, statements, and settlement records even after filing.\n\n## Conclusion\n\nThe key points businesses should pay particular attention to for the 2026 VAT filing are “stricter surcharges,” “submission of statements,” “verification of business location,” “deduction limits,” and “reclassification of taxable and tax-exempt sales.” YouTubers and content creators, used car dealers, restaurants, food distributors, and real estate rental businesses will be significantly impacted by these changes, so they require separate review before filing.\n\nAccurate VAT filing is not merely a procedure for paying taxes, but a process for reviewing a business’s revenue structure, cost documentation, and transaction stability. By reviewing the amendments in advance and organizing supporting documentation, businesses can minimize unnecessary surcharges and ensure they do not miss out on eligible deductions.","content_html":"\u003ch2\u003e\n\u003ca href=\"#changes-to-the-2026-value-added-tax-filing-at-a-glance\" class=\"anchor\" id=\"changes-to-the-2026-value-added-tax-filing-at-a-glance\"\u003e\u003c/a\u003eChanges to the 2026 Value-Added Tax Filing at a Glance\u003c/h2\u003e\n\u003cp\u003eBusinesses preparing for the final Value-Added Tax filing in July 2026 should not stop at simply collecting sales and purchase data. Certain industries now have new documents to submit, limits on some deductions have changed, and oversight of fraudulent tax invoices and businesses operating under false names has been strengthened.\u003c/p\u003e\n\u003cp\u003eSince VAT filing cycles repeat regularly, the process may feel similar each time; however, failing to keep up with these amendments can lead to the following issues:\u003c/p\u003e\n\u003cul\u003e\n\u003cli\u003eYou may end up paying more tax by omitting eligible deductions.\u003c/li\u003e\n\u003cli\u003eIncorrect classification of taxable and tax-exempt items may result in an amended return or a tax assessment.\u003c/li\u003e\n\u003cli\u003eFailing to submit required schedules may result in a surcharge.\u003c/li\u003e\n\u003cli\u003eIf a business partner’s tax invoice does not match the actual transaction, you may face surcharges or the risk of an audit.\u003c/li\u003e\n\u003c/ul\u003e\n\u003cp\u003eThis article summarizes the Value-Added Tax (VAT) filing requirements for the first half of 2026 and the major changes taking effect in the second half of 2026 from a business practitioner’s perspective. Before actually filing your return, you must confirm with the National Tax Service, HomeTax, your local tax office, or a tax agent whether these changes apply to your specific industry and transaction structure.\u003c/p\u003e\n\u003ch2\u003e\n\u003ca href=\"#summary-table-of-major-amendments-for-2026\" class=\"anchor\" id=\"summary-table-of-major-amendments-for-2026\"\u003e\u003c/a\u003eSummary Table of Major Amendments for 2026\u003c/h2\u003e\n\u003cdiv class=\"overflow-x-auto\"\u003e\u003ctable\u003e\n\u003cthead\u003e\n\u003ctr\u003e\n\u003cth\u003eCategory\u003c/th\u003e\n\u003cth\u003eAmendment or Note\u003c/th\u003e\n\u003cth\u003eEffective/Verification Date\u003c/th\u003e\n\u003cth\u003eActions Required by Business Owners\u003c/th\u003e\n\u003c/tr\u003e\n\u003c/thead\u003e\n\u003ctbody\u003e\n\u003ctr\u003e\n\u003ctd data-label=\"Category\"\u003eFictitious Tax Invoices\u003c/td\u003e\n\u003ctd data-label=\"Amendment or Note\"\u003eSurcharge rate for issuing/receiving increased from 3% to 4%\u003c/td\u003e\n\u003ctd data-label=\"Effective/Verification Date\"\u003eVerify during 2026 filing\u003c/td\u003e\n\u003ctd data-label=\"Actions Required by Business Owners\"\u003eVerify the existence of the transaction, contracts, deposit records, and delivery documentation\u003c/td\u003e\n\u003c/tr\u003e\n\u003ctr\u003e\n\u003ctd data-label=\"Category\"\u003eMedia Content Creation Industry\u003c/td\u003e\n\u003ctd data-label=\"Amendment or Note\"\u003eMandatory submission of cash sales statements\u003c/td\u003e\n\u003ctd data-label=\"Effective/Verification Date\"\u003eFinal tax return for the first half of 2026\u003c/td\u003e\n\u003ctd data-label=\"Actions Required by Business Owners\"\u003eConfirm eligibility (e.g., YouTubers, creators) and submit statements\u003c/td\u003e\n\u003c/tr\u003e\n\u003ctr\u003e\n\u003ctd data-label=\"Category\"\u003eManagement of Businesses Operating Under a Nominee’s Name\u003c/td\u003e\n\u003ctd data-label=\"Amendment or Note\"\u003eCodification of grounds for submitting evidence proving actual business operations\u003c/td\u003e\n\u003ctd data-label=\"Effective/Verification Date\"\u003eUpon request by the tax office or during tax return review\u003c/td\u003e\n\u003ctd data-label=\"Actions Required by Business Owners\"\u003eRetain lease agreements, utility bills, employment contracts, and photos of business premises\u003c/td\u003e\n\u003c/tr\u003e\n\u003ctr\u003e\n\u003ctd data-label=\"Category\"\u003eDeemed Input Tax Credit for Used Cars\u003c/td\u003e\n\u003ctd data-label=\"Amendment or Note\"\u003eNew credit limit established; partial carryover of credit allowed\u003c/td\u003e\n\u003ctd data-label=\"Effective/Verification Date\"\u003eEffective July 1, 2026\u003c/td\u003e\n\u003ctd data-label=\"Actions Required by Business Owners\"\u003eCalculate credit limit in advance; maintain vehicle registration numbers and VINs\u003c/td\u003e\n\u003c/tr\u003e\n\u003ctr\u003e\n\u003ctd data-label=\"Category\"\u003eImported Unprocessed Foodstuffs\u003c/td\u003e\n\u003ctd data-label=\"Amendment or Note\"\u003eExtension of VAT Exemption for Certain Items, Such as Cocoa Beans\u003c/td\u003e\n\u003ctd data-label=\"Effective/Verification Date\"\u003eThrough 2027\u003c/td\u003e\n\u003ctd data-label=\"Actions Required by Business Owners\"\u003eVerify Whether Imported and Distributed Items Qualify for Exemption\u003c/td\u003e\n\u003c/tr\u003e\n\u003ctr\u003e\n\u003ctd data-label=\"Category\"\u003eSimply Processed Food Products in Bottles or Cans\u003c/td\u003e\n\u003ctd data-label=\"Amendment or Note\"\u003eTransition to Taxable Status After Exemption Expires\u003c/td\u003e\n\u003ctd data-label=\"Effective/Verification Date\"\u003eRemain Vigilant After 2025\u003c/td\u003e\n\u003ctd data-label=\"Actions Required by Business Owners\"\u003eClassify as Taxable Sales and Reflect in Tax Invoices and Tax Returns\u003c/td\u003e\n\u003c/tr\u003e\n\u003ctr\u003e\n\u003ctd data-label=\"Category\"\u003eInput Tax Credit for Tax-Exempt Agricultural Products\u003c/td\u003e\n\u003ctd data-label=\"Amendment or Note\"\u003eExtension of Preferential Deduction Limit\u003c/td\u003e\n\u003ctd data-label=\"Effective/Verification Date\"\u003eThrough the end of 2027\u003c/td\u003e\n\u003ctd data-label=\"Actions Required by Business Owners\"\u003eRestaurants and similar businesses should verify whether any deductions were omitted\u003c/td\u003e\n\u003c/tr\u003e\n\u003ctr\u003e\n\u003ctd data-label=\"Category\"\u003eDeemed Rent from Lease Deposits\u003c/td\u003e\n\u003ctd data-label=\"Amendment or Note\"\u003eApply an annual fixed deposit interest rate of 2.9%\u003c/td\u003e\n\u003ctd data-label=\"Effective/Verification Date\"\u003eReport for the applicable tax period\u003c/td\u003e\n\u003ctd data-label=\"Actions Required by Business Owners\"\u003eLandlords should recheck the deemed rent calculation formula\u003c/td\u003e\n\u003c/tr\u003e\n\u003ctr\u003e\n\u003ctd data-label=\"Category\"\u003eSimplified Taxation Threshold\u003c/td\u003e\n\u003ctd data-label=\"Amendment or Note\"\u003eRaised to 104 million won based on the previous year’s supply value\u003c/td\u003e\n\u003ctd data-label=\"Effective/Verification Date\"\u003eWhen Verifying Tax Classification\u003c/td\u003e\n\u003ctd data-label=\"Actions Required by Business Owners\"\u003eCheck tax classification and tax invoice requirements on HomeTax\u003c/td\u003e\n\u003c/tr\u003e\n\u003ctr\u003e\n\u003ctd data-label=\"Category\"\u003eVAT Refunds for Cosmetic Surgery for Foreign Tourists\u003c/td\u003e\n\u003ctd data-label=\"Amendment or Note\"\u003eVAT refund system to be terminated\u003c/td\u003e\n\u003ctd data-label=\"Effective/Verification Date\"\u003eStarting in 2026\u003c/td\u003e\n\u003ctd data-label=\"Actions Required by Business Owners\"\u003eExisting refund processing methods will be discontinued\u003c/td\u003e\n\u003c/tr\u003e\n\u003c/tbody\u003e\n\u003c/table\u003e\u003c/div\u003e\n\u003ch2\u003e\n\u003ca href=\"#amendments-to-check-immediately-for-the-first-half-of-2026-filings\" class=\"anchor\" id=\"amendments-to-check-immediately-for-the-first-half-of-2026-filings\"\u003e\u003c/a\u003eAmendments to Check Immediately for the First Half of 2026 Filings\u003c/h2\u003e\n\u003ch3\u003e\n\u003ca href=\"#1-increase-in-surtax-rates-for-issuing-or-receiving-fictitious-tax-invoices\" class=\"anchor\" id=\"1-increase-in-surtax-rates-for-issuing-or-receiving-fictitious-tax-invoices\"\u003e\u003c/a\u003e1. Increase in Surtax Rates for Issuing or Receiving Fictitious Tax Invoices\u003c/h3\u003e\n\u003cp\u003eTax invoices issued or received without an actual transaction are generally referred to as fictitious tax invoices. According to the 2026 amendments, the surcharge rate for issuing or receiving fictitious tax invoices has been raised from 3% to 4% of the original supply value.\u003c/p\u003e\n\u003cp\u003eIt is important to note that fictitious tax invoices are not merely a clerical error. Exchanging tax invoices without an actual transaction results in the improper deduction of input tax or the distortion of revenue and expenses. Therefore, the National Tax Service strictly regulates fraudulent tax invoices.\u003c/p\u003e\n\u003cp\u003eBusinesses are advised to keep the following documents on file for each transaction:\u003c/p\u003e\n\u003cul\u003e\n\u003cli\u003eContracts, purchase orders, and quotes\u003c/li\u003e\n\u003cli\u003eTax invoices and transaction statements\u003c/li\u003e\n\u003cli\u003eBank transfer records and credit card payment records\u003c/li\u003e\n\u003cli\u003eDelivery notes, inspection certificates, and waybills\u003c/li\u003e\n\u003cli\u003eDeliverables, emails, and work reports\u003c/li\u003e\n\u003cli\u003eBusiness registration status and actual contact information of business partners\u003c/li\u003e\n\u003c/ul\u003e\n\u003cp\u003eIn particular, for tax invoices used to claim input tax credits, simply having the invoice is not sufficient. You must also verify whether the goods or services were actually supplied, whether the amount and supply date match, and whether the business partner is a legitimate business entity.\u003c/p\u003e\n\u003ch3\u003e\n\u003ca href=\"#2-submission-of-cash-sales-statements-for-media-content-creators-eg-youtubers-and-creators\" class=\"anchor\" id=\"2-submission-of-cash-sales-statements-for-media-content-creators-eg-youtubers-and-creators\"\u003e\u003c/a\u003e2. Submission of Cash Sales Statements for Media Content Creators (e.g., YouTubers and Creators)\u003c/h3\u003e\n\u003cp\u003eStarting with the first half of 2026’s Value-Added Tax (VAT) filing, businesses engaged in media content creation—such as YouTubers and creators—must verify whether they are required to submit cash sales statements. If they are required to submit a cash sales statement but fail to do so, a surcharge equivalent to 1% of the non-submitted amount may be imposed.\u003c/p\u003e\n\u003cp\u003eMedia content creators have diverse revenue streams.\u003c/p\u003e\n\u003cul\u003e\n\u003cli\u003ePlatform advertising revenue\u003c/li\u003e\n\u003cli\u003eDonations, membership fees, and similar forms of support such as “Star Balloons” and “Super Chat”\u003c/li\u003e\n\u003cli\u003eProduction fees for sponsored or advertising content\u003c/li\u003e\n\u003cli\u003eSales of courses, e-books, and merchandise\u003c/li\u003e\n\u003cli\u003eSettlements from overseas platforms\u003c/li\u003e\n\u003cli\u003eIndividual service fees received in cash or via bank transfer\u003c/li\u003e\n\u003c/ul\u003e\n\u003cp\u003eDepending on the transaction structure, it may vary which of these amounts constitute taxable revenue, whether a zero-rate or foreign transaction review is required, and whether the business is subject to the cash sales statement filing requirement. Even if you entrust your tax filing to a tax agent, you must inform them in advance that you have “income from media content creation” and provide settlement data for each platform.\u003c/p\u003e\n\u003cp\u003eBusiness owners filing their own returns must ensure they do not omit the option to attach or enter a cash sales statement on the HomeTax filing screen.\u003c/p\u003e\n\u003ch3\u003e\n\u003ca href=\"#3-strengthened-crackdown-on-front-companies-and-management-of-supporting-documentation\" class=\"anchor\" id=\"3-strengthened-crackdown-on-front-companies-and-management-of-supporting-documentation\"\u003e\u003c/a\u003e3. Strengthened Crackdown on Front Companies and Management of Supporting Documentation\u003c/h3\u003e\n\u003cp\u003eA “front company” refers to a business registered under the name of someone other than the actual business operator, or a situation where the nominal business owner and the actual operator are different. Such structures can lead to the issuance of fraudulent tax invoices, tax evasion, and income concealment, posing significant tax risks.\u003c/p\u003e\n\u003cp\u003eWith the 2026 amendments to the Value-Added Tax Act, the requirement to submit documentation proving the actual status of business operations has been codified. Since the head of the competent tax office may request the submission of supporting documents when verifying the existence of a business premises or whether the business is actually in operation, it is prudent for even legitimate businesses to keep the necessary documentation on hand.\u003c/p\u003e\n\u003cp\u003eExamples of acceptable supporting documents are as follows.\u003c/p\u003e\n\u003cdiv class=\"overflow-x-auto\"\u003e\u003ctable\u003e\n\u003cthead\u003e\n\u003ctr\u003e\n\u003cth\u003eDocument\u003c/th\u003e\n\u003cth\u003eInformation Verified\u003c/th\u003e\n\u003c/tr\u003e\n\u003c/thead\u003e\n\u003ctbody\u003e\n\u003ctr\u003e\n\u003ctd data-label=\"Document\"\u003eLease Agreement\u003c/td\u003e\n\u003ctd data-label=\"Information Verified\"\u003eBusiness location and right of use\u003c/td\u003e\n\u003c/tr\u003e\n\u003ctr\u003e\n\u003ctd data-label=\"Document\"\u003eUtility bills (electricity, water, gas) and other service charges\u003c/td\u003e\n\u003ctd data-label=\"Information Verified\"\u003eActual use of the business premises\u003c/td\u003e\n\u003c/tr\u003e\n\u003ctr\u003e\n\u003ctd data-label=\"Document\"\u003eEmployment Contracts\u003c/td\u003e\n\u003ctd data-label=\"Information Verified\"\u003eHired staff and operational substance\u003c/td\u003e\n\u003c/tr\u003e\n\u003ctr\u003e\n\u003ctd data-label=\"Document\"\u003ePhotos of the business premises (interior and exterior)\u003c/td\u003e\n\u003ctd data-label=\"Information Verified\"\u003eSignage, equipment, inventory, office space, etc.\u003c/td\u003e\n\u003c/tr\u003e\n\u003ctr\u003e\n\u003ctd data-label=\"Document\"\u003eContracts and purchase orders with business partners\u003c/td\u003e\n\u003ctd data-label=\"Information Verified\"\u003eEvidence of actual business operations\u003c/td\u003e\n\u003c/tr\u003e\n\u003ctr\u003e\n\u003ctd data-label=\"Document\"\u003eRecords of sales and purchase payments\u003c/td\u003e\n\u003ctd data-label=\"Information Verified\"\u003eUse of a business-registered bank account and transaction flow\u003c/td\u003e\n\u003c/tr\u003e\n\u003c/tbody\u003e\n\u003c/table\u003e\u003c/div\u003e\n\u003cp\u003eIf you are operating your business properly, there is no need to worry excessively. However, if your business registration address differs from your actual place of business, if the business is registered under the name of a family member or acquaintance, or if the account holder’s name differs from the business owner’s, it is advisable to resolve these issues in advance.\u003c/p\u003e\n\u003ch2\u003e\n\u003ca href=\"#effective-july-1-2026-limit-on-deemed-input-tax-credit-for-used-cars\" class=\"anchor\" id=\"effective-july-1-2026-limit-on-deemed-input-tax-credit-for-used-cars\"\u003e\u003c/a\u003eEffective July 1, 2026: Limit on Deemed Input Tax Credit for Used Cars\u003c/h2\u003e\n\u003cp\u003eThere is also an important change for businesses that buy and sell used cars, such as used car dealerships. Starting July 1, 2026, a limit will be imposed on the deemed input tax credit for used cars.\u003c/p\u003e\n\u003cp\u003ePreviously, if certain requirements were met, 10/110 of the acquisition cost could be claimed as a deemed input tax credit; however, following the amendment, the credit will be applied up to the limit of “sales revenue minus the amount of purchases documented by tax invoices.”\u003c/p\u003e\n\u003ch3\u003e\n\u003ca href=\"#practical-considerations\" class=\"anchor\" id=\"practical-considerations\"\u003e\u003c/a\u003ePractical Considerations\u003c/h3\u003e\n\u003cul\u003e\n\u003cli\u003eThe acquisition cost and sales price for each vehicle must be tracked separately.\u003c/li\u003e\n\u003cli\u003ePurchases for which tax invoices were received must be separated from purchases eligible for the deemed input tax credit.\u003c/li\u003e\n\u003cli\u003eFor amounts that cannot be deducted due to exceeding the limit, verify whether they can be carried forward for deduction within one year.\u003c/li\u003e\n\u003cli\u003eSince vehicle registration numbers and VINs must be submitted when applying for the deduction, do not omit vehicle-specific identification information.\u003c/li\u003e\n\u003c/ul\u003e\n\u003cp\u003eUsed car dealers are advised to calculate the eligible deduction amount in advance for transactions in the second half of the year. Since amounts exceeding the deduction limit may occur, it is practically safer to create monthly or vehicle-specific tracking sheets and review them with a tax agent.\u003c/p\u003e\n\u003ch2\u003e\n\u003ca href=\"#items-from-past-amendments-that-require-continued-attention-in-2026\" class=\"anchor\" id=\"items-from-past-amendments-that-require-continued-attention-in-2026\"\u003e\u003c/a\u003eItems from Past Amendments That Require Continued Attention in 2026\u003c/h2\u003e\n\u003ch3\u003e\n\u003ca href=\"#1-extension-of-vat-exemption-for-imported-unprocessed-foodstuffs-such-as-cocoa-beans\" class=\"anchor\" id=\"1-extension-of-vat-exemption-for-imported-unprocessed-foodstuffs-such-as-cocoa-beans\"\u003e\u003c/a\u003e1. Extension of VAT Exemption for Imported Unprocessed Foodstuffs Such as Cocoa Beans\u003c/h3\u003e\n\u003cp\u003eThe value-added tax (VAT) exemption for certain imported unprocessed foodstuffs, such as cocoa beans, cocoa shells, and cocoa husks, has been extended through 2027. Businesses that import or distribute these items must verify their product classification and transaction type to ensure they remain eligible for the VAT exemption through 2027, just as before.\u003c/p\u003e\n\u003cp\u003eIt is difficult to determine whether imported food items are taxable or tax-exempt based solely on their names. Since the determination may vary depending on the actual items declared to customs, the degree of processing, the type of packaging, and the method of domestic sale, it is advisable to keep the import declaration certificate and product classification documents on file together.\u003c/p\u003e\n\u003ch3\u003e\n\u003ca href=\"#2-transition-to-taxation-for-simply-processed-food-products-packaged-in-bottles-or-cans\" class=\"anchor\" id=\"2-transition-to-taxation-for-simply-processed-food-products-packaged-in-bottles-or-cans\"\u003e\u003c/a\u003e2. Transition to Taxation for Simply Processed Food Products Packaged in Bottles or Cans\u003c/h3\u003e\n\u003cp\u003eCertain simply processed food products packaged in bottles or cans were previously exempt from value-added tax (VAT), but have become subject to taxation following the expiration of the exemption period. Examples include soy sauce, soybean paste, chili paste, kimchi, fermented seafood, tofu, pickled vegetables, and blanched vegetables.\u003c/p\u003e\n\u003cp\u003eBusinesses selling these items must verify the following:\u003c/p\u003e\n\u003cul\u003e\n\u003cli\u003eTaxable/exempt classification by product in POS systems or online stores\u003c/li\u003e\n\u003cli\u003eTaxable/exempt classification when issuing tax invoices or cash receipts\u003c/li\u003e\n\u003cli\u003eTaxable/exempt classification in purchase records\u003c/li\u003e\n\u003cli\u003eWhether the taxable base is reflected in the VAT return\u003c/li\u003e\n\u003c/ul\u003e\n\u003cp\u003eIf these items are still being treated as tax-exempt, it could result in the omission of taxable sales; therefore, you must immediately review your product master data and accounting standards.\u003c/p\u003e\n\u003ch3\u003e\n\u003ca href=\"#3-extension-of-the-preferential-limit-for-deemed-input-tax-credit-on-tax-exempt-agricultural-products\" class=\"anchor\" id=\"3-extension-of-the-preferential-limit-for-deemed-input-tax-credit-on-tax-exempt-agricultural-products\"\u003e\u003c/a\u003e3. Extension of the Preferential Limit for Deemed Input Tax Credit on Tax-Exempt Agricultural Products\u003c/h3\u003e\n\u003cp\u003eBusinesses that purchase tax-exempt agricultural products to supply taxable goods or services may receive a deemed input tax credit under certain conditions. Industries such as restaurants and food manufacturing are significantly affected by this system.\u003c/p\u003e\n\u003cp\u003eThe preferential deduction limit has been extended through the end of 2027, allowing both sole proprietors and corporate businesses to benefit from a limit more favorable than the standard limit.\u003c/p\u003e\n\u003cdiv class=\"overflow-x-auto\"\u003e\u003ctable\u003e\n\u003cthead\u003e\n\u003ctr\u003e\n\u003cth\u003eBusiness Type\u003c/th\u003e\n\u003cth\u003eStandard Deduction Limit\u003c/th\u003e\n\u003cth\u003ePreferential Deduction Limit\u003c/th\u003e\n\u003c/tr\u003e\n\u003c/thead\u003e\n\u003ctbody\u003e\n\u003ctr\u003e\n\u003ctd data-label=\"Business Type\"\u003eSole Proprietor\u003c/td\u003e\n\u003ctd data-label=\"Standard Deduction Limit\"\u003e40–50%\u003c/td\u003e\n\u003ctd data-label=\"Preferential Deduction Limit\"\u003e55–75%\u003c/td\u003e\n\u003c/tr\u003e\n\u003ctr\u003e\n\u003ctd data-label=\"Business Type\"\u003eCorporation\u003c/td\u003e\n\u003ctd data-label=\"Standard Deduction Limit\"\u003e30%\u003c/td\u003e\n\u003ctd data-label=\"Preferential Deduction Limit\"\u003e50%\u003c/td\u003e\n\u003c/tr\u003e\n\u003c/tbody\u003e\n\u003c/table\u003e\u003c/div\u003e\n\u003cp\u003eFor the deemed input tax credit on tax-exempt agricultural products, supporting documentation—such as invoices by supplier, credit card sales slips, and cash receipts—is essential. Businesses with a high proportion of agricultural product purchases should verify that no invoices are missing before filing their tax return.\u003c/p\u003e\n\u003ch3\u003e\n\u003ca href=\"#4-interest-rate-for-deemed-rent-on-lease-deposits-29-per-annum\" class=\"anchor\" id=\"4-interest-rate-for-deemed-rent-on-lease-deposits-29-per-annum\"\u003e\u003c/a\u003e4. Interest Rate for Deemed Rent on Lease Deposits: 2.9% per annum\u003c/h3\u003e\n\u003cp\u003eReal estate landlords may need to calculate deemed rental income based on security deposits. The fixed-term deposit interest rate to be applied for the 2026 tax return is set at 2.9% per annum.\u003c/p\u003e\n\u003cp\u003eDeemed rental income is a system that includes the amount equivalent to the investment income from the security deposit in the taxable base, even if no actual monthly rent was received. Applying the interest rate incorrectly can result in underreporting or overreporting; therefore, you must verify the security deposit amount, lease term, taxable floor area, and fixed-term deposit interest rate specified in the lease agreement.\u003c/p\u003e\n\u003ch3\u003e\n\u003ca href=\"#5-threshold-for-simplified-taxpayers-raised\" class=\"anchor\" id=\"5-threshold-for-simplified-taxpayers-raised\"\u003e\u003c/a\u003e5. Threshold for Simplified Taxpayers Raised\u003c/h3\u003e\n\u003cp\u003eThe threshold for simplified taxation—based on the total supply value from the previous year—has been raised from 80 million won to 104 million won. Consequently, small-scale business operators who were previously close to qualifying as general taxpayers under the old criteria may now be classified as simplified taxpayers under the new standards.\u003c/p\u003e\n\u003cp\u003eAlthough the tax burden and filing methods for simplified taxpayers differ from those of general taxpayers, it cannot be said that they are simply advantageous in every respect. In particular, you must review the obligation to issue tax invoices, the method of input tax credit, whether business partners can claim input tax credits, and the value-added rates by industry.\u003c/p\u003e\n\u003cp\u003eThe items to check are as follows:\u003c/p\u003e\n\u003cul\u003e\n\u003cli\u003eCheck your current tax classification on HomeTax\u003c/li\u003e\n\u003cli\u003eCheck the total supply value for the previous year\u003c/li\u003e\n\u003cli\u003eCheck whether your business falls under industries or regions excluded from the simplified tax system\u003c/li\u003e\n\u003cli\u003eCheck whether you are required to issue tax invoices\u003c/li\u003e\n\u003cli\u003eCheck whether your business partners typically require tax invoices\u003c/li\u003e\n\u003c/ul\u003e\n\u003ch3\u003e\n\u003ca href=\"#6-end-of-vat-refunds-for-cosmetic-and-plastic-surgery-services-for-foreign-tourists\" class=\"anchor\" id=\"6-end-of-vat-refunds-for-cosmetic-and-plastic-surgery-services-for-foreign-tourists\"\u003e\u003c/a\u003e6. End of VAT Refunds for Cosmetic and Plastic Surgery Services for Foreign Tourists\u003c/h3\u003e\n\u003cp\u003eThe value-added tax (VAT) refund system for cosmetic and plastic surgery services provided to foreign tourists was discontinued as of 2026. Medical institutions and related businesses must take care not to file reports or provide guidance based on the previous refund system.\u003c/p\u003e\n\u003cp\u003eAny internal guidelines, payment systems, refund processing procedures, or foreign-language information pages that were created under the previous system must be updated. Incorrect refund processing may result in future tax assessments or customer complaints.\u003c/p\u003e\n\u003ch2\u003e\n\u003ca href=\"#checklists-by-industry\" class=\"anchor\" id=\"checklists-by-industry\"\u003e\u003c/a\u003eChecklists by Industry\u003c/h2\u003e\n\u003ch3\u003e\n\u003ca href=\"#restaurants-cafes-and-food-manufacturing\" class=\"anchor\" id=\"restaurants-cafes-and-food-manufacturing\"\u003e\u003c/a\u003eRestaurants, Cafes, and Food Manufacturing\u003c/h3\u003e\n\u003cul\u003e\n\u003cli\u003eVerify that you have collected all documentation for the purchase of tax-exempt agricultural products.\u003c/li\u003e\n\u003cli\u003eReview whether you are eligible to apply the preferential limit for deemed input tax credits.\u003c/li\u003e\n\u003cli\u003eIf you sell simple-processed food products packaged in bottles or cans, verify whether they are subject to taxation.\u003c/li\u003e\n\u003cli\u003eCheck that the taxable and tax-exempt codes for each item in your POS system are up to date.\u003c/li\u003e\n\u003c/ul\u003e\n\u003ch3\u003e\n\u003ca href=\"#youtubers-creators-and-content-providers\" class=\"anchor\" id=\"youtubers-creators-and-content-providers\"\u003e\u003c/a\u003eYouTubers, Creators, and Content Providers\u003c/h3\u003e\n\u003cul\u003e\n\u003cli\u003eVerify whether your business qualifies as a media content creation business.\u003c/li\u003e\n\u003cli\u003eCompare settlement data from each platform with your bank deposit records.\u003c/li\u003e\n\u003cli\u003eEnsure you do not omit any amounts subject to the cash sales statement requirement.\u003c/li\u003e\n\u003cli\u003eRevenue from overseas platforms may require review for taxation, the zero-rate, or foreign transactions, depending on the transaction structure.\u003c/li\u003e\n\u003c/ul\u003e\n\u003ch3\u003e\n\u003ca href=\"#used-car-sales\" class=\"anchor\" id=\"used-car-sales\"\u003e\u003c/a\u003eUsed Car Sales\u003c/h3\u003e\n\u003cul\u003e\n\u003cli\u003eCalculate the deemed input tax credit limit for transactions occurring on or after July 1, 2026.\u003c/li\u003e\n\u003cli\u003eMaintain records of vehicle registration numbers and VINs for each vehicle.\u003c/li\u003e\n\u003cli\u003eReview whether amounts exceeding the limit can be carried forward for deduction.\u003c/li\u003e\n\u003cli\u003eSeparate the amounts on tax invoices from purchases eligible for the deemed input tax credit.\u003c/li\u003e\n\u003c/ul\u003e\n\u003ch3\u003e\n\u003ca href=\"#real-estate-leasing-business\" class=\"anchor\" id=\"real-estate-leasing-business\"\u003e\u003c/a\u003eReal Estate Leasing Business\u003c/h3\u003e\n\u003cul\u003e\n\u003cli\u003eVerify whether lease deposits are subject to the deemed rental income calculation.\u003c/li\u003e\n\u003cli\u003eVerify that the annual interest rate of 2.9% for time deposits has been applied.\u003c/li\u003e\n\u003cli\u003eOrganize lease agreements, records of security deposit changes, and monthly rent collection records.\u003c/li\u003e\n\u003cli\u003eIf operating both taxable and tax-exempt leases, verify the apportionment of common input tax.\u003c/li\u003e\n\u003c/ul\u003e\n\u003ch3\u003e\n\u003ca href=\"#import-and-distribution-business\" class=\"anchor\" id=\"import-and-distribution-business\"\u003e\u003c/a\u003eImport and Distribution Business\u003c/h3\u003e\n\u003cul\u003e\n\u003cli\u003eVerify whether imported unprocessed foodstuffs, such as cocoa beans, are eligible for an extension of tax exemption.\u003c/li\u003e\n\u003cli\u003eRetain import declaration certificates and commodity classification documents.\u003c/li\u003e\n\u003cli\u003eReview whether the distinction between taxable and tax-exempt goods changes at the domestic sales stage.\u003c/li\u003e\n\u003cli\u003eVerify that the correct type of tax invoice or sales receipt is issued to business partners.\u003c/li\u003e\n\u003c/ul\u003e\n\u003ch2\u003e\n\u003ca href=\"#documents-business-owners-should-prepare-before-filing\" class=\"anchor\" id=\"documents-business-owners-should-prepare-before-filing\"\u003e\u003c/a\u003eDocuments Business Owners Should Prepare Before Filing\u003c/h2\u003e\n\u003cp\u003eMost VAT filing errors result from missing documents, incorrect classification of taxable versus tax-exempt items, or discrepancies in tax invoices. It is recommended to prepare at least the following documents before filing.\u003c/p\u003e\n\u003cdiv class=\"overflow-x-auto\"\u003e\u003ctable\u003e\n\u003cthead\u003e\n\u003ctr\u003e\n\u003cth\u003eDocument\u003c/th\u003e\n\u003cth\u003eReason for Requirement\u003c/th\u003e\n\u003c/tr\u003e\n\u003c/thead\u003e\n\u003ctbody\u003e\n\u003ctr\u003e\n\u003ctd data-label=\"Document\"\u003eSales Tax Invoices and Receipts\u003c/td\u003e\n\u003ctd data-label=\"Reason for Requirement\"\u003eVerify taxable and tax-exempt sales\u003c/td\u003e\n\u003c/tr\u003e\n\u003ctr\u003e\n\u003ctd data-label=\"Document\"\u003ePurchase Tax Invoices and Receipts\u003c/td\u003e\n\u003ctd data-label=\"Reason for Requirement\"\u003eReview input tax credits and deemed input tax credits\u003c/td\u003e\n\u003c/tr\u003e\n\u003ctr\u003e\n\u003ctd data-label=\"Document\"\u003eCredit Card Sales and Cash Receipt Data\u003c/td\u003e\n\u003ctd data-label=\"Reason for Requirement\"\u003eTo prevent omission of reported sales\u003c/td\u003e\n\u003c/tr\u003e\n\u003ctr\u003e\n\u003ctd data-label=\"Document\"\u003eOnline Platform Settlement Data\u003c/td\u003e\n\u003ctd data-label=\"Reason for Requirement\"\u003eTo verify sales from delivery apps, online shopping malls, and content platforms\u003c/td\u003e\n\u003c/tr\u003e\n\u003ctr\u003e\n\u003ctd data-label=\"Document\"\u003eBank Account Transaction History\u003c/td\u003e\n\u003ctd data-label=\"Reason for Requirement\"\u003eTo reconcile cash sales with actual amounts received\u003c/td\u003e\n\u003c/tr\u003e\n\u003ctr\u003e\n\u003ctd data-label=\"Document\"\u003eLease Agreements\u003c/td\u003e\n\u003ctd data-label=\"Reason for Requirement\"\u003eTo verify the existence of business premises and deemed rental income from leasing activities\u003c/td\u003e\n\u003c/tr\u003e\n\u003ctr\u003e\n\u003ctd data-label=\"Document\"\u003eUtility and Management Fee Statements\u003c/td\u003e\n\u003ctd data-label=\"Reason for Requirement\"\u003eProving Business Premises Operation\u003c/td\u003e\n\u003c/tr\u003e\n\u003ctr\u003e\n\u003ctd data-label=\"Document\"\u003eVehicle Purchase and Sale Records\u003c/td\u003e\n\u003ctd data-label=\"Reason for Requirement\"\u003eCalculating the Deduction Limit for Used Cars\u003c/td\u003e\n\u003c/tr\u003e\n\u003ctr\u003e\n\u003ctd data-label=\"Document\"\u003eImport Declaration Certificate\u003c/td\u003e\n\u003ctd data-label=\"Reason for Requirement\"\u003eDetermining Taxable vs. Tax-Exempt Imported Items\u003c/td\u003e\n\u003c/tr\u003e\n\u003c/tbody\u003e\n\u003c/table\u003e\u003c/div\u003e\n\u003ch2\u003e\n\u003ca href=\"#practical-guidelines-for-reducing-filing-errors\" class=\"anchor\" id=\"practical-guidelines-for-reducing-filing-errors\"\u003e\u003c/a\u003ePractical Guidelines for Reducing Filing Errors\u003c/h2\u003e\n\u003col\u003e\n\u003cli\u003eFirst, check the revised regulations for your specific industry. The same rules do not apply to all businesses.\u003c/li\u003e\n\u003cli\u003eCompare the amounts on tax invoices with your actual deposit and withdrawal records.\u003c/li\u003e\n\u003cli\u003eDistinguish between taxable sales, tax-exempt sales, and sales subject to the zero-rated tax.\u003c/li\u003e\n\u003cli\u003eVerify whether any supporting statements need to be submitted.\u003c/li\u003e\n\u003cli\u003eCheck not only whether a deduction is available but also the limit and supporting documentation requirements.\u003c/li\u003e\n\u003cli\u003eVerify the facts regarding tax invoices from suspicious business partners before filing.\u003c/li\u003e\n\u003cli\u003eRetain contracts, statements, and settlement records even after filing.\u003c/li\u003e\n\u003c/ol\u003e\n\u003ch2\u003e\n\u003ca href=\"#conclusion\" class=\"anchor\" id=\"conclusion\"\u003e\u003c/a\u003eConclusion\u003c/h2\u003e\n\u003cp\u003eThe key points businesses should pay particular attention to for the 2026 VAT filing are “stricter surcharges,” “submission of statements,” “verification of business location,” “deduction limits,” and “reclassification of taxable and tax-exempt sales.” YouTubers and content creators, used car dealers, restaurants, food distributors, and real estate rental businesses will be significantly impacted by these changes, so they require separate review before filing.\u003c/p\u003e\n\u003cp\u003eAccurate VAT filing is not merely a procedure for paying taxes, but a process for reviewing a business’s revenue structure, cost documentation, and transaction stability. By reviewing the amendments in advance and organizing supporting documentation, businesses can minimize unnecessary surcharges and ensure they do not miss out on eligible deductions.\u003c/p\u003e\n","tags":["Value added tax","Tax filing","Sole proprietor","Corporation","Tax management"],"faqs":[{"question":"What is the first change you should check for in the 2026 Value-Added Tax (VAT) return?","answer":"You should first check the following: the increase in the surcharge rate for processed tax invoices, the requirement for media content creators to submit cash sales statements, the management of evidence for businesses operating under a false name, and the establishment of a new limit on the deemed input tax credit for used cars. Depending on your industry, it is also important to understand the distinction between taxable and tax-exempt food products, the deemed input tax credit for tax-exempt agricultural products, and the criteria for simplified taxpayers."},{"question":"How did the surcharge rate for false tax invoices change in 2026?","answer":"The surcharge rate for fictitious tax invoices issued or received without an actual transaction has increased from 3% to 4% of the supply value. Businesses must retain not only tax invoices but also supporting documents—such as contracts, payment records, and delivery records—that prove the actual transaction."},{"question":"Can I be charged a surcharge even if I didn't realize there was a problem with the tax invoice issued by my business partner?","answer":"If an invoice is determined to be fictitious or inaccurate, the recipient may also face the risk of being assessed a surcharge. Therefore, it is prudent to verify the business partner, the details of the supply, payment records, and the actual delivery of goods or services before claiming an input tax credit."},{"question":"Do YouTubers and content creators also have to submit cash sales reports?","answer":"Businesses engaged in media content creation must verify whether they are required to submit a cash sales statement when filing their value-added tax return for the first half of 2026. Failure to report the required amounts may result in a surcharge equal to 1% of the amount not reported."},{"question":"What income documentation do media content creators need to prepare?","answer":"It is recommended that you prepare platform advertising revenue settlement documents, donation records, sponsorship and advertising contracts, bank deposit records, and sales records for e-books, courses, and merchandise. Revenue from overseas platforms may require separate review depending on the transaction structure."},{"question":"What documents should I keep on hand in preparation for stricter enforcement against businesses operating under false names?","answer":"It is advisable to keep records such as the lease agreement, statements of utility bills (electricity, water, and gas), the employment contract, photos of the interior and exterior of the business premises, contracts with business partners, and bank statements for the business’s account. These documents will help prove that the business is actually in operation."},{"question":"When does the input tax credit limit for used cars take effect?","answer":"It has been confirmed that the limit on the input tax credit for used cars will apply to transactions occurring on or after July 1, 2026. Therefore, you must distinguish between the application criteria for transactions reported in the first half of 2026 and those occurring in the second half of the year."},{"question":"What additional information is required when applying for the input tax credit for used cars?","answer":"Since you must submit the vehicle registration number and VIN when applying for a deduction, you must accurately manage the identification information for each vehicle. You must also organize the acquisition cost, sale price, and tax invoice purchase amount for each vehicle in order to calculate the deduction limit."},{"question":"What is the threshold for simplified taxation in 2026?","answer":"The threshold for eligibility as a simplified taxpayer—based on the total value of supplies in the previous year—has been raised to 104 million won. However, there may be exceptions depending on industry, region, and the obligation to issue tax invoices, so you should check your tax classification on HomeTax."},{"question":"Is it always advantageous to switch to the simplified tax system?","answer":"While taxpayers under the simplified tax system may have advantages in terms of filing and tax burden, this is not always the case. You should also consider whether your business partners require tax invoices, how the input tax credit system works, and how the value-added rate is applied by industry."},{"question":"Are minimally processed food products packaged in bottles or cans exempt from value-added tax?","answer":"Certain minimally processed food products packaged in bottles, cans, and other containers are now subject to tax following the expiration of their tax-exempt period. If you sell items such as soy sauce, soybean paste, red pepper paste, kimchi, fermented seafood, tofu, pickled vegetables, or blanched vegetables, you must recheck the tax-exempt or taxable status for each product."},{"question":"Until when will the preferential limit for the deemed input tax credit on duty-free agricultural products apply?","answer":"It has been confirmed that the preferential limit for the deemed input tax credit on tax-exempt agricultural products has been extended through the end of 2027. Businesses that purchase large quantities of tax-exempt agricultural products—such as restaurants and food manufacturers—are advised to verify their supporting documentation and the credit limit before filing their tax returns."},{"question":"What is the interest rate used to calculate the deemed rent from a security deposit?","answer":"The annual interest rate for time deposits to be applied when calculating deemed rent from security deposits for the 2026 tax filing has been set at 2.9%. Landlords should verify the security deposit amount, lease term, and whether the income is subject to taxation to minimize calculation errors."},{"question":"Will VAT refunds for cosmetic and reconstructive medical services provided to foreign tourists continue to be available?","answer":"The value-added tax (VAT) refund program for cosmetic and reconstructive medical services provided to foreign tourists has been discontinued as of 2026. Relevant medical institutions must review their systems to ensure they no longer apply the previous refund guidelines, payment processes, or reporting procedures."},{"question":"What should I check on HomeTax before filing my value-added tax return?","answer":"On HomeTax, you must verify your tax classification, records of issued and received electronic tax invoices, credit card sales, cash receipts, estimated tax notices or estimated tax returns, and the documents attached to your tax return. Depending on your industry, you may also need to review additional documents, such as cash sales statements or documents related to deemed input tax credits."}],"sources":[{"url":"https://www.nts.go.kr","title":"National Tax Service","type":"source"},{"url":"https://www.hometax.go.kr","title":"National Tax Service HomeTax","type":"source"},{"url":"https://www.law.go.kr","title":"National Law Information Center","type":"source"}],"images":[{"id":219,"url":"https://injoys.com/rails/active_storage/blobs/redirect/eyJfcmFpbHMiOnsiZGF0YSI6MjE0MCwicHVyIjoiYmxvYl9pZCJ9fQ==--ce37fd00cb65d8b7273d448e145e424b4803028e/ai-35093873.webp","is_representative":true,"generation_method":"ai_image","license":"ai_generated","mime_type":"image/webp","translations":{"ko":{"alt":"서류와 계산기 앞에 앉은 사업자와 세금 관련 아이콘 일러스트","caption":"부가가치세 신고와 공제 항목을 점검하는 사업자를 표현한 일러스트입니다.","description":null},"en":{"alt":"Business owner at a desk with documents, calculator, checklist, and tax-related icons","caption":"The illustration shows a business owner reviewing VAT filing and deduction items.","description":null},"ja":{"alt":"書類と電卓の前に座る事業者と税務関連アイコンのイラスト","caption":"消費税申告と控除項目を確認する事業者を表したイラストです。","description":null},"es":{"alt":"Empresaria en un escritorio con documentos, calculadora, lista e iconos fiscales","caption":"La ilustración muestra a una empresaria revisando declaraciones de IVA y deducciones.","description":null},"id":{"alt":"Pemilik usaha di meja dengan dokumen, kalkulator, daftar cek, dan ikon pajak","caption":"Ilustrasi ini menggambarkan pemilik usaha meninjau pelaporan PPN dan item pengurangan.","description":null},"pt":{"alt":"Empresária à mesa com documentos, calculadora, checklist e ícones fiscais","caption":"A ilustração mostra uma empresária revisando a declaração de IVA e itens de dedução.","description":null},"zh-hant":{"alt":"坐在桌前的業主，周圍有文件、計算機、清單與稅務圖示","caption":"插圖呈現業主檢查增值稅申報與扣抵項目的情境。","description":null}}},{"id":220,"url":"https://injoys.com/rails/active_storage/blobs/redirect/eyJfcmFpbHMiOnsiZGF0YSI6MjE0NiwicHVyIjoiYmxvYl9pZCJ9fQ==--057bf11f192081baf5499cc90413cc933ad83c66/ai-360066b5.webp","is_representative":false,"generation_method":"ai_image","license":"ai_generated","mime_type":"image/webp","translations":{"ko":{"alt":"방패와 체크 표시, 서류와 돋보기 주변에 차량·식비·매장 등 공제 항목이 연결된 일러스트","caption":"부가가치세 신고 시 공제 가능 항목과 주의할 비용을 점검하는 장면입니다.","description":null},"en":{"alt":"Shield, documents, and magnifier linked to vehicles, meals, utilities, retail, and warning icons","caption":"The illustration shows VAT-related expense categories being checked for deductions and risks.","description":null},"ja":{"alt":"盾と書類、虫眼鏡の周囲に車両費や飲食費、店舗、警告アイコンが並ぶイラスト","caption":"消費税申告で控除対象と注意すべき費用を確認する様子を示しています。","description":null},"es":{"alt":"Escudo, documentos y lupa conectados con vehículos, alimentos, tienda y alertas de gastos","caption":"La ilustración muestra categorías de gastos revisadas para deducciones y riesgos del IVA.","description":null},"id":{"alt":"Perisai, dokumen, dan kaca pembesar terhubung ke kendaraan, makanan, toko, dan ikon peringatan","caption":"Ilustrasi ini menunjukkan kategori biaya yang diperiksa untuk potongan dan risiko PPN.","description":null},"pt":{"alt":"Escudo, documentos e lupa ligados a veículos, alimentos, loja e alertas de despesas","caption":"A ilustração mostra categorias de despesas avaliadas para créditos e riscos de IVA.","description":null},"zh-hant":{"alt":"盾牌、文件與放大鏡連結車輛、餐飲、店鋪和費用警示圖示","caption":"這張插圖呈現申報加值稅時檢查可扣抵項目與風險費用的情境。","description":null}}}],"published_at":"2026-07-18T22:12:24+09:00","updated_at":"2026-07-18T22:12:24+09:00","license":"cc_by","translation_status":"reviewed","available_locales":["ko","en","ja","es"],"data_locales":["ko","en","ja","es","id","pt","zh-hant"],"url":"https://injoys.com/en/articles/2026-vat-changes-korea-business-guide"}