VAT is levied at a rate of 10% on the supply of goods and services, except zero-rated VAT on certain supply of goods and services (i.e. services rendered to non-residents earning foreign currency, etc.) and exemption on certain goods and services (e.g. basic life necessities and services, such as unprocessed foodstuffs and agricultural products; medical and health services; finance and insurance services; duty-exempt goods).
Electronic VAT invoicing in Home Tax system is a compulsory requirement. If a taxpayer fails to issue the electronic VAT invoice or report electronically to tax authorities, the relevant penalties shall be imposed.
VAT returns shall be filed to the tax office every quarter (25th day from the quarter ending date) in Korea.