Recently the Korean government is providing a covid-19 subsidy relief for registered businesses to lower the VAT burden.
Usually, Korean VAT (Value Add Tax) rate is 10% so when you make sales, you add up 10% on your invoice to your client.
This 10% VAT is then kept by the company and paid to the tax office on a regular basis.
However, due to covid-19 subsidy, the Government is requiring only 3~5% of the VAT to be paid.
This means that your business is only required to pay the 3~5% and can keep the remainder, if your last 6 months sales was less than 40 million KRW.*
(Excludes real estate rental businesses and adult establishments).
