VAT Calculator
Enter sales, purchases, and taxpayer type to compute Korean VAT payable or refund instantly.
Total sales for the filing period, excluding VAT.
Total business purchases excluding VAT, supported by tax invoices.
VAT payable
4,000,000KRW
- Sales VAT
- 10,000,000KRW
- Purchase deduction
- 6,000,000KRW×10%
- Effective rate vs sales
- 4.00%
- General taxpayer: sales VAT (10%) − purchase VAT (10%)
What is Korean VAT?
Value Added Tax (VAT) is an indirect tax levied on the value added when a business supplies goods or services. Korea's standard VAT rate is 10%, with different filing methods for general taxpayers, simple taxpayers, and tax-exempt businesses. General taxpayers pay the difference between output VAT (10% of sales) and input VAT (VAT paid on purchases). Qualifying evidence (tax invoice, credit card sales slip, cash receipt, etc.) is required to claim input VAT credit. If input VAT exceeds output VAT, a refund is available. Simple taxpayer status is available for businesses with annual revenue under KRW 104M (2026). Tax is calculated as revenue × industry-specific value-added ratio (15–40%) × 10%, and only partial input VAT credit is allowed. Annual revenue under KRW 48M is exempt from payment (filing is still required). This calculator simulates a standard general-taxpayer case. Special items such as deemed input VAT credit, credit-card-issuance credit, and zero-rated exports are not reflected. General taxpayers file twice (January and July); simple taxpayers file once (January).
When is this calculator useful?
Pre-launch VAT burden estimate
Estimate quarterly VAT based on projected revenue and purchases — essential for cash-flow planning.
General vs. simple taxpayer comparison
Businesses with revenue under KRW 104M can choose simple taxpayer status. General is often better with high purchases; simple is often better with low purchases.
Freelancer VAT filing
Freelancers with business registration must file VAT quarterly. Use this calculator to estimate the payment.
Refund possibility review
Temporary excess input VAT (large equipment or inventory purchases before revenue) can be refunded. Estimate the refund amount.
Simplified taxpayer industry rates
| Industry | Value-add rate | Effective rate |
|---|---|---|
| Retail / Food service (15%) | 15% | 1.5% |
| Manufacturing / Agriculture (20%) | 20% | 2.0% |
| Construction / Transport / IT (30%) | 30% | 3.0% |
| Finance / Real-estate rental / Other services (40%) | 40% | 4.0% |
Key thresholds
- Simplified taxpayer ceiling: 104,000,000 KRW
- VAT payment exemption ceiling: 48,000,000 KRW
How to read the result
The result is composed of: • Sales (supply value): excluding VAT. • Output VAT: sales × 10%. • Purchases (supply value): excluding VAT. • Input VAT: purchases × 10% (creditable with qualifying evidence). • Payable: output − input. Negative payable means a refund. Simple taxpayers use a separate formula. General taxpayers file in January (prior H2) and July (current H1).
Worked examples
General taxpayer, KRW 100M sales / KRW 60M purchases
Assume a general taxpayer with KRW 100M in sales and KRW 60M in purchases (supply value basis). ① Sales VAT = 100M × 10% = KRW 10M ② Input VAT credit = 60M × 10% = KRW 6M ③ Payable = 10M − 6M = KRW 4M
Simplified taxpayer (retail), KRW 60M sales / KRW 30M purchases
Assume a simplified taxpayer in retail (15% value-add rate) with KRW 60M in sales and KRW 30M in purchases — above the KRW 48M tax-exempt threshold, so VAT is still payable. ① Sales VAT = 60M × 15% × 10% = KRW 900K ② Input VAT credit = 30M × 0.5% = KRW 150K ③ Payable = 900K − 150K = KRW 750K Even at the same KRW 60M in sales, the simplified taxpayer's value-add-rate method results in a far lighter tax burden than the general taxpayer's full 10% method.
Things to keep in mind
- This calculator targets general taxpayers. Simple taxpayers use industry-specific value-added ratio × revenue × 10% — calculated separately.
- Input VAT credit requires qualifying evidence (tax invoice, credit card sales slip, cash receipt, etc.) at the time of purchase. Plain receipts are not creditable.
- Exports are zero-rated (0%) and input VAT is refundable. This calculator assumes domestic transactions — exporters need separate calculation.
- Some industries (food, accommodation) can apply deemed input VAT credit (agricultural purchases). Not reflected in this calculator.
- Businesses with high credit-card sales (revenue under KRW 1B) can claim a credit-card-issuance credit (1–1.3% of credit-card sales). Not reflected.
- Missing the VAT filing deadline incurs a 20% non-filing penalty plus late-payment interest. Stick to the quarterly schedule.
Frequently asked questions
- What's the difference between general and simplified taxpayers?
- If your prior-year sales (VAT-inclusive consideration) were under KRW 104M, you're a simplified taxpayer; at or above, you're a general taxpayer. This threshold was raised from KRW 80M to KRW 104M by the VAT Act Enforcement Decree amendment effective 1 July 2024 (real estate leasing and taxable entertainment venues remain at the KRW 48M threshold). General taxpayers pay 10% of sales minus input VAT credit; simplified taxpayers apply an industry value-add rate (15-40%) for a much lower payment. However, simplified taxpayers get no refunds and only a limited 0.5% purchase deduction.
- How do I claim input VAT credit?
- You need a tax invoice, card sales receipt, or cash receipt to claim input VAT. Simple receipts don't qualify for general taxpayers, and simplified taxpayers only get a limited 0.5% deduction. Personal expenses unrelated to the business don't qualify.
- When are VAT returns filed?
- General taxpayers (individual business owners) file twice a year: January (for Jul-Dec of the prior year) and July (for Jan-Jun of the current year) — corporations file quarterly, 4 times a year. Simplified taxpayers file once a year in January. There are also preliminary filings in April and October, so practical management is effectively quarterly.
- What isn't reflected in this calculator?
- Credit-card sales VAT credits, deemed input VAT credit (for agricultural/marine products, etc.), zero-rating (exports), separating tax-exempt sales, and penalties are all simplified out. Use the Hometax auto-calculator or a tax accountant for actual filing.
- Why does the simplified taxpayer's value-add rate differ by industry?
- It reflects how large a share of revenue goes to purchases (cost ratio) in each industry. Retail/food service is 15%, manufacturing/farming-fishing is 20%, construction/transport is 30%, and higher-margin services like finance/insurance/real estate are 40% — higher-margin industries get a higher value-add rate.
- What happens if my sales grow and I convert to a general taxpayer?
- Once your prior-year sales (VAT-inclusive consideration) reach KRW 104M, you're automatically converted to general taxpayer status starting the next filing period. You may claim an inventory input VAT credit on existing stock at conversion under certain conditions, so managing inventory right before the switch matters for tax savings.
- Do simplified taxpayers have to issue tax invoices?
- Since the 2021 reform, simplified taxpayers with annual sales of KRW 48M or more must issue tax invoices. Below KRW 48M (this calculator's vatExempt band), a simple receipt is sufficient.
- Does this calculator compute the quarterly preliminary filing amounts too?
- No. This calculator only computes the final payable amount based on total sales/purchases for the full filing period (half-year or annual) — it doesn't split out the April/October preliminary filing installments.
Official Sources
Always verify with the official sources below