Liaison Office VAT refund in Korea
A liaison office has no VAT filing liability in Korea, but it can still claim for VAT refund on certain expenses such as office rental fees, office supplies, and advertising services.
Three points to note about liaison office VAT refund:
- June 30 is VAT refund due date on the previous year’s expense
- Minimum VAT claim amount is KRW 300,000 (For example, a liaison office must have spent at least KRW 3,000,000 on office rent fee or maintenance last year to claim a VAT refund)
- This is one and only chance to claim for 2021 VAT. (Unlike other tax filings, if the liaison office miss the VAT refund due date, then there is no grace period for late filing.)
Starting in January 2023, a liaison office has obligation to submit Input VAT invoice statement(매입처별 세금계산서 합계표) two times a year.
As this is a new obligation to liaison offices, it is easy to overlook the due date but the consequence would be a penalty tax.
If you want to ask more questions on this topic, feel free to reach myself at www.aratax.net
Written by Ara Jung (CTA)
All information provided is of limited scope and not exhaustive or comprehensive of any subject. It is not intended to be legal advice, and should not be used in place of consultation.