10 Additional Mandatory Cash Receipt Industries Including Clothing and Computer Retail, Study Room Operations

Expanded to a total of 87... 20% penalty on transaction amount for violations

[Asia Economy Reporter Kwangho Lee] Ten industries including hairdressing, clothing retail, footwear retail, telecommunications equipment retail, computer and peripheral devices and software retail, pet and related supplies retail, study room operation, goshiwon operation, hardware and heating equipment retail have been added to the mandatory cash receipt issuance industries.

Businesses in mandatory issuance industries must issue cash receipts for cash transactions of 100,000 KRW or more (including VAT) per transaction, even if the consumer does not request it. Failure to comply will result in a penalty tax (fine) of 20% of the transaction amount.

The National Tax Service announced on the 15th that the number of mandatory cash receipt issuance industries will be expanded from the existing 77 to 87 by adding 10 new industries.

About 70 business operators belong to the newly added mandatory issuance industries, but whether a business falls under the mandatory issuance industries is judged based on the actual business rather than the industry listed on the business registration certificate, so more businesses may be affected.

The National Tax Service is actively informing businesses about the issuance obligation system through individual issuance obligation notices and meetings with partner groups to prevent any disadvantages due to lack of awareness of the changes.

For businesses without cash receipt terminals, cash receipts can still be issued through the National Tax Service’s Hometax cash receipt issuance system.

If a business in the mandatory cash receipt issuance industries receives cash payment of 100,000 KRW or more per transaction for goods or services but fails to issue a cash receipt, a penalty tax of 20% of the transaction amount will be imposed from the point of violation.

Furthermore, even if the consumer and the business agree at the time of transaction not to issue a cash receipt on the condition of cash transaction and price discount, failure to issue a cash receipt is considered a violation of the issuance obligation.

If a consumer does not receive a cash receipt after a cash transaction of 100,000 KRW or more per transaction with a business in the mandatory issuance industries, they can report the non-issuance within five years from the transaction date via mail, phone, or Hometax, attaching documents that can verify the transaction such as contracts, receipts, or bank transfer slips.

Once non-issuance is confirmed, the reporting consumer will receive a reward equivalent to 20% of the reported non-issued amount, and employees can receive income deduction benefits for cash receipts.

The reward payment limit is 500,000 KRW per transaction and 2,000,000 KRW annually per individual.

An official from the National Tax Service said, "We will continuously promote the reporting reward system and focus on managing violators of the cash receipt issuance obligation," adding, "Businesses in mandatory issuance industries are urged to faithfully issue cash receipts to avoid disadvantages from violations."

Meanwhile, since its introduction in 2005, the cash receipt system has steadily increased issuance amounts and greatly contributed to the formalization of taxable income for self-employed businesses. It increased from 18.6 trillion KRW in 2005 to 118.6 trillion KRW last year.

This content was produced with the assistance of AI translation services.