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South Korea to Tax Digital Goods, Services, July 2015


 Seoul

Beginning July 1, 2015, certain digital services sold to South Korean consumers from businesses located outside of the country will be subject to the standard 10% Korean value added tax (VAT). Among others, the tax will apply to software applications sold by Apple’s App Store and Google’s Play Store.

Last month, Korea’s National Tax Service released details about the plan. It reads, “Where a foreign business operator supplies any electronic service (e-service) to the Republic of Korea (Korea), the e-services are deemed to be supplied within Korea. Therefore, the foreign supplier shall file and pay Value Added Tax on the e-service providing from July 1, 2015.”

Electronic service is defined as one that “is operated by being stored in a mobile communication terminal device or a computer, or a service that can be used in real time without being stored in any device.” E-services must:

  • Work with the shape of sign, letter, voice, sound or video that are created or processed in an optical or electronic form (game file, voice file, video file, electronic document or software).
  • Work to improve the above electronic services.

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Gail Cole
Avalara Author
Gail Cole
Gail Cole
Avalara Author Gail Cole
Gail began researching and writing about sales tax in 2012 and has been fascinated with it ever since. She has a penchant for uncovering unusual tax facts, and endeavors to make complex sales tax laws more digestible for both experts and laypeople.