South Korea levies 10% VAT on foreign digital services

South Korea is to require non-resident providers of digital services to consumers liable to charge 10% VAT from 1 July 2019. 

The services subject to VAT will include online advertising and other services. This will affect companies such as Amazon, Facebook and Google. It is expected that the measure will raise WON 400 billion (approximately €310 million) per annum.

The measure comes as EU countries struggles to agree on a 3% Digital Services Tax on such supplies to capture non-resident profits being made by the digital giants.