Taxes (FI-AP/AR) 

Purpose

The Taxes component covers that most important laws and business practices specific to South Korea. For generic information about Taxes, see Taxes (FI-AP/AR).

Features

Country-Specific Functions

The generic tax functions work on the assumption that each company registers once with the tax authorities and is assigned one VAT registration number. It assumes that the company conducts all dealings relating to taxes under this one number.

In South Korea, however, a company can consist of multiple VAT entities. For example, take a company with one site in Seoul, where its headquarters and a factory are located, and another factory in Pusan. The site in Seoul registers with the nearest district tax office. It has its own VAT registration number, and remits its taxes to that tax office. Similarly, the site in Pusan registers with its own district tax office. It also has a VAT registration number of its own and reports only to that tax office. In the system, you represent each VAT registration using a business place.

Where withholding taxes are concerned, each VAT registration is also responsible for collecting income taxes and remitting them to the district tax office. In addition, inhabitant tax, a further form of income tax, is payable to the appropriate local tax office.

The system offers functions for calculating and reporting both these forms of taxes to the appropriate tax offices.

Country Template

The country template for South Korea comes with settings for calculating and posting value-added taxes and withholding taxes.