VAT Payment Due by the 25th of This Month... 1.1 Million People Exempted Due to COVID-19 and Wildfire Damage

[Asia Economy Sejong=Reporter Son Seon-hee] Corporate businesses must file and pay the first installment of the 2022 value-added tax (VAT) by the 25th of this month. Individual general taxpayers and small-scale corporate businesses are required to pay 50% of the tax amount paid in the previous tax period according to the preliminary notice. However, the preliminary notice will be exempted ex officio for 1.1 million people affected by COVID-19 and wildfires.

On the 7th, the National Tax Service (NTS) provided guidance on the VAT filing and payment process containing these details. Six hundred thousand corporate businesses must file and pay VAT for their first-quarter business performance from January 1 to March 31 by the 25th.

However, small-scale corporate businesses with a total supply amount of less than 150 million KRW in the previous six-month tax period are exempt from the preliminary filing obligation. Instead, 150,000 small-scale corporate businesses and 750,000 individual general taxpayers must pay the preliminary notice tax amount, which is half of the tax amount paid in the previous tax period.

Notably, starting from this filing, the exemption threshold for the preliminary notice has been raised from 300,000 KRW to 500,000 KRW. If the preliminary notice tax amount is less than 500,000 KRW, taxpayers only need to file and pay taxes during the final filing period in July.

The NTS has decided to ex officio exempt 1.1 million businesses affected by COVID-19 and wildfires in the Gangwon region from the preliminary notice. The support targets include individual businesses whose sales have decreased due to quarantine measures such as gathering bans and business restrictions or whose sales are below a certain scale (600 million KRW for wholesale and retail, 300 million KRW for food and lodging, etc.), as well as businesses located in special disaster areas such as Uljin, Samcheok, Gangneung, and Donghae.

If tax support recipients wish to receive the preliminary notice due to the burden of lump-sum tax payment, they can request the tax office to issue the notice.

Additionally, the NTS plans to provide maximum support, such as extending payment deadlines, for COVID-19 affected businesses that cannot pay the preliminary notice tax amount by the deadline.

The NTS also announced that it will expedite VAT refunds for small and medium-sized enterprises (SMEs) and COVID-19 affected companies. SMEs with sales under 100 billion KRW and more than three years in business, businesses in special disaster areas related to COVID-19, and exemplary taxpayers who apply for early refunds by the 20th will receive their refunds by the 29th.

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