Responsibility of VAT Exempt Business Operator; Owner of 교습소

A VAT-exempt business operator(부가세면세사업자) refers to a business operator who supplies goods or services that are exempt from VAT. They do not receive VAT, so they do not have a duty to report VAT. In other words, they do not need to report VAT, and therefore, they do not have to pay VAT.

However, exempt business operators must report their business status report (사업장현황신고) instead of VAT return. The business status report must be made between January 1 and February 13(for FY 2023), and this is a system to grasp the income of the business operator. You must provide information about the income amount of the previous year through this report.

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If you do not report your business status, you may be subject to a surcharge of 0.5% of your income amount, so please be careful. In addition, the tax office can conduct a field survey of the business site directly, and in this case, you may be hit by an unexpected tax bomb, so please be careful.

Business status reports can also be made online, and you can report through HomeTax or tax reporting programs. Using these programs, you can handle not only business status reports but also comprehensive income tax reports and withholding tax reports.

Finally, the business status report is very important. Since it is a report on the income of the previous year, you must report the comprehensive income tax in May this year based on the status report submitted to the tax office by February 10. It is important that the business status report and the comprehensive income tax report match, because if you do it roughly, you may have to pay a lot of tax when you report the comprehensive income tax, which can be said to be the core of tax saving. Everything is connected. Things like national pension and health insurance premiums are also determined based on the comprehensive income tax report, so it is better to pay as little comprehensive income tax as possible.

As a VAT-exempt business operator, if you operate a business that is obligated to issue a cash receipt, you must issue a cash receipt even if the other party does not request a cash receipt when you supply goods or services with a transaction amount of 100,000 won or more and receive the price in cash.

The business types obligated to issue cash receipts are added every year, and 13 business types were added in 2024. If you do not issue a cash receipt, you will have to pay a surcharge of 20% of the issuance amount.

Exempt business operators can issue invoices(계산서) and cash receipts(현금영수증), but not tax invoices(세금계산서), and these are all qualified evidences. Therefore, exempt business operators should issue invoices that do not include VAT in the supply price, and if the transaction is made in cash, they should issue a cash receipt.