South Korea raises the simplified VAT taxpayer threshold from KRW 80 million to KRW 104 million

What changed in detail

Presidential Decree No. 34270, signed on 29 February 2024, amended Article 109(1) of the Enforcement Decree of the Value Added Tax Act. It replaced “8천만원” (KRW 80 million) with “1억4백만원” (KRW 104 million) as the amount below which an individual business operator’s prior-year supply proceeds (공급대가) qualify it for simplified taxation (간이과세). The VAT Act lets the Enforcement Decree set this amount; KRW 104 million is 130% of the KRW 80 million in the Act.

Under Article 10 of the decree’s addendum, the new threshold applies from the determination of simplified-taxpayer status for 1 July 2024 to 30 June 2025, made on 2023 supply proceeds. The same decree added a re-entry rule (Article 116(3) and (4)): a sole proprietor who gave up simplified status to issue tax invoices may, subject to conditions, return to it within three years of giving it up if its prior-year supply proceeds are at least KRW 48 million and below KRW 104 million.

Article 109(1) of the consolidated Enforcement Decree in force from 1 April 2026 still reads KRW 104 million, with the 29 February 2024 amendment noted against it.

What it means

This change is still in force. The addendum makes KRW 104 million apply from the 2024–25 determination onwards, not only for that one year, and the consolidated decree on law.go.kr, current from 1 April 2026, still sets it.

Simplified taxpayers pay VAT at reduced, sector-based rates on supply proceeds and have lighter filing duties. The cost is that a simplified taxpayer below KRW 48 million cannot issue tax invoices, which matters to business customers who need them to claim input VAT. The re-entry rule added by the same decree is aimed at proprietors in that position. The test runs on VAT-inclusive proceeds of the previous calendar year and is redone each year.