Korea tax guide
Korea Business Status Reports for VAT-Exempt Foreign Business Owners
Hometax Guides
Who this guide is for
- Foreign individual business owners with VAT-exempt activities in Korea
- Freelancers checking whether a separate annual report applies
Quick Answer
VAT exemption does not automatically remove reporting duties. Check whether your individual business must file a business status report (사업장현황신고). The statutory deadline is February 10 of the following year, subject to applicable deadline adjustments. Confirm exclusions, industry schedules and the relevant year's NTS instructions. This report does not replace annual income tax filing.
Key points
- Confirm VAT-exempt status and reporting eligibility first.
- Keep the income year separate from the submission year.
- Reconcile revenue and retain the filing receipt for income tax preparation.
Detailed explanation
Confirm your activity before choosing a form
Start with your business registration and actual work. A foreign nationality or an English job title does not identify the correct reporting route. Keep the Korean activity code beside your records when asking the tax office to confirm your position.
| Your situation | What to check |
|---|---|
| VAT-exempt individual business | Whether the business status report and industry attachments apply |
| Zero-rated activity | The applicable VAT return route |
| Simplified VAT taxpayer | The applicable VAT reporting rules |
| Mixed taxable and exempt activities | Whether exempt revenue was already reported through the VAT return |
Article 78 provides a deemed-reporting rule where a mixed business reports its exempt revenue through the applicable VAT return. It also includes businesses that closed or suspended operations during the year. Confirm the facts before submitting a duplicate report or assuming closure removed the obligation.
Who should check the annual report?
The NTS overview lists exempt individual businesses and specific exclusions, including qualifying tax-association reporting and certain commission activities. An exemption from VAT alone does not establish an exclusion from this report.
The January 2026 NTS notice included medical practices, academies, housing rental businesses and certain personal-service businesses. It also described expanded guidance for creators and delivery or driving service providers. A notification list is not a substitute for checking your own activity.
Match the income year to the filing year
The statutory deadline is February 10 of the following year. For example, NTS instructed businesses to report 2025 income by February 10, 2026. That completed cycle is not the deadline for 2026 income.
For 2026 records, prepare for the following year’s reporting cycle and confirm the official 2027 calendar, holiday adjustments and any extensions when published. This guide does not present a 2027 campaign deadline as already announced.
Prepare one reconciled set of records
The 2026 notice describes reporting annual revenue, major business expenses and operational information such as equipment and employees. Hometax and Sontax provide assistance and prefilled information for eligible filers. Compare those figures with your own records.
A practical preparation sequence is:
- Create a folder for the income year and each business registration.
- Compare your ledger with bank receipts, platform statements and invoices. Explain differences rather than forcing totals to match.
- Separate refunds, transfers between your accounts and customer payments so the same movement is not counted twice.
- Mark unresolved items for your tax representative before entering final totals.
- Save the submitted form, attachments and acceptance receipt together.
The NTS overview identifies revenue review schedules and invoice summary statements among attachments required for relevant businesses. Check the forms for your industry. It also distinguishes industry-specific non-reporting penalties from statement-submission penalties; do not apply one penalty percentage to every exempt business.
Submit and preserve the result
Use the current official Hometax or Sontax instructions for 사업장현황신고, or confirm filing arrangements with the tax office responsible for your business. Review the business identifier, income year and attachment list before submission. A saved draft is not evidence of acceptance.
Keep a short reconciliation note explaining any difference between your source records and the submitted totals. If you later find an omission, ask how to correct the report and any affected statements.
Prepare the income tax return separately
Use the report as a reconciliation checkpoint for the annual income tax return. Keep the same source ledger and explain later adjustments. Reporting revenue here does not by itself settle income tax, establish deductible expenses or complete other tax obligations.
Documents you may need
- Business registration and activity code
- Annual revenue ledger and supporting statements
- Sales and purchase invoices and card or cash receipt records
- Industry-specific revenue review schedules where required
- Closure or suspension records where applicable
Common mistakes
- Treating VAT exemption as exemption from all reporting
- Copying a prior year's deadline into the next reporting cycle
- Assuming prefilled data includes every receipt
- Treating this report as the annual income tax return
When should you ask a tax professional?
Ask a qualified tax professional if you have income from several countries, business income, unclear tax residency, treaty questions, missing documents, late filing concerns, or a visa situation that depends on tax records. This site explains general patterns only and cannot review your personal facts.
FAQ
Is VAT-exempt the same as zero-rated?
No. Do not select the exempt-business report simply because no VAT was charged. Confirm the activity's classification and registration first.
When is the business status report due?
Article 78 sets February 10 of the following year as the statutory deadline. The NTS 2026 notice covered 2025 income. Check the next reporting year's official instructions and any applicable deadline adjustment.
Does a closed business still need to check this report?
Yes. Article 78 includes businesses closed or suspended during the income year. Check your activity and any applicable exception before skipping the report.
Does this replace annual income tax filing?
No. Review your annual income tax return obligation separately and reconcile it with the revenue reported here.
Official Sources to Verify
Check the tax year, eligibility conditions, and publication date in the official material before applying a rule. A link marked “Service portal” helps you find a service; it does not substantiate a particular rate or entitlement.