South Korea Adds Value Added Tax (VAT) That will affect Amazon Sellers

VAT Tax

Personally, I rarely see sales to South Korea, but for those that do happen, sellers will now have to deal with a Value Added Tax.  And, it not just on sales.  Amazon will collect VAT on South Korea’s behalf on remote services provided by Amazon including  Selling on Amazon fees (listing/referral services), monthly subscription fees, and Sponsored Ads. The new rules take effect from September 1, 2019.

The South Korea Value Added Tax (VAT) collection on remote services will begin on September 1, 2019 for All South Korean residents

Here are the details:

The South Korean Government has expanded existing legislation requiring non-resident companies (Amazon, eBay, etc) providing “remote services”, to begin collecting South Korean VAT on these services, when they are provided to South Korean residents or persons who are not registered for VAT. In this context, remote services provided by Amazon are the Selling on Amazon fees (listing/referral services), monthly subscription fees, and Sponsored Ads. The new rules take effect from September 1, 2019.

Unless a seller has provided Amazon with its South Korean Business Registration Number (BRN) as evidence that it is VAT-registered in South Korea, the rule requires Amazon to collect and remit South Korean VAT at a standard rate of 10% on Selling on Amazon fees, paid by sellers who are residents of South Korea.

South Korean sellers who provide Amazon with their BRN will not have a VAT of 10% applied to their Selling on Amazon fees.

To provide Amazon with your South Korean VAT ID:

  1. Log into Seller Central.
  2. Under Settings choose Account Info.
  3. In the section Tax Information, click on VAT information.
  4. From the list of countries, select South Korea.
  5. Add your 10-digit South Korean BRN. For example: ‘123-45-67890’.
  6. Click I accept and acknowledge all conditions set out in the Tax registration agreement.
  7. Click Save.

To get a South Korean VAT number, just reach out to the nearest South Korean Consulate (Anchorage, Atlanta, Boston, Chicago Los Angeles or Dallas), and they will give you instructions.

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