Attention to all foreign B2C electronic service providers operating in South Korea: An essential regulatory update requires your immediate attention.

The recently announced Korean tax reform proposal by the Korean government has introduced the application of penalties to foreign suppliers offering Business-to-Consumer (B2C) electronic services within the Korean market for non-compliance.

📌 Mandatory Registration: Under the VATL, it has been mandated that every entrepreneur, regardless of their origin, must register their business with the tax authority within 20 days of initiating operations.

📌 Clarification on Penalty: At present, it's important to note that the existing 1% penalty, associated with non-compliance with the registration requirement, does not apply to foreign B2C providers. However, a new proposal is under consideration that seeks to extend this penalty to foreign suppliers as well.

🔍 New Proposal: As part of ongoing efforts to establish a level playing field, the proposal aims to introduce penalties against foreign suppliers who fail to comply with the simplified VAT registration outlined in the VATL. This initiative is intended to promote equitable business practices for both local and foreign entities.

📌 Authority Intervention: Acknowledging the intricacies of compliance, the head of the competent tax office retains the authority to intervene and oversee the registration process in cases of non-compliance. This framework ensures accountability and offers assistance in adhering to the regulations.

Please note that while these details provide current insights, they are subject to potential changes during the Korean Congress review of the government's proposed tax law amendments.

Stay informed and keep your finger on the pulse of evolving regulations to maintain business integrity and compliance.

#SouthKoreaTaxReform #ForeignB2CServices #RegulatoryChanges #BusinessCompliance #KoreaBusinessLaws #KEAInsights