South Korean VAT on e-services

Non-resident providers of electronic services have been required to charge VAT on their sales to Korean consumers since 1 July 2015.

Definition of South Korean e-services

The South Korean VAT net includes income on the following services provided electronically:

  • Games, music, video files
  • Documents and software
  • Upgrade of above services
  • Cloud computer services (from July 2019)

VAT registration

There is no threshold for VAT on e-services provided by non-residents.  An application must be made to the Korean National Tax Service.  If the provider uses a marketplace or intermediary to provide and charge for the service, then they are exempted from the obligation to VAT register.

VAT compliance

Providers are not required to produce VAT invoices on their B2C sales. VAT returns are submitted on a quarterly basis.  They should be filed by the 25th of the month following the reporting quarter end.


B2B supplies of e-services

Foreign providers are not required to charge VAT on sales to VAT-registered Korean businesses. Instead, the customer should record the transaction in their VAT return through the reverse charge mechanism.


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