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Value Added Tax (VAT) Refund: Who Qualifies and What You Get

Learn how freelancers registered as business operators can claim refunds on VAT paid for their business-related expenses in South Korea.

This scheme allows certain business owners to claim back the tax they have paid on costs related to their professional work.

Who it's for

This scheme is specifically designed for freelancers who have officially registered themselves as business operators. If you are working as a freelancer but have not completed the necessary registration to be recognized as a business operator by the authorities, you will not qualify for this specific tax benefit.

What you get

When you make purchases that are directly related to your professional business activities, you pay Value Added Tax (VAT) on those costs. Through this scheme, you can receive a refund on the VAT that you have already paid for those business-related expenses. This helps reduce your overall business overhead by recovering some of the tax costs incurred during your daily operations.

What it costs you

There is no direct monetary fee to apply for this refund, but it does require significant time and administrative effort. The most important requirement is that you must keep all of your business receipts and official documentation. You must maintain a clear and organized record of every transaction that qualifies as a business expense to ensure you can substantiate your claim when required.

The catch to know

The most common mistake is attempting to claim this refund as an individual rather than as a business. You must be a registered business owner to claim this; simply being a freelancer without official business registration means you cannot access these funds.

How to apply

  1. Confirm that your status is officially recognized as a registered business operator.
  2. Systematically collect and save every receipt for any expense used in your business activities.
  3. Review your business-related spending to ensure it meets the criteria for VAT recovery.
  4. Follow the official submission process provided by the National Tax Service to file your claim.