Michaela Merz

South Korea – proposed change to the scope of the supply of electronic services – B2B supplies may be excluded

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In our initial post on the South Korean VAT rule changes regarding the supply of electronic services by non-established service providers (effective from 1 July 2015), that the legislation subjected both B2B and B2C supplies to VAT under the new rules. There has been controversy whether the legislation really intended to apply the same treatment to B2B supplies, as to B2C.

The recently submitted Korean tax reform proposal for 2015 brings clarity in this regard by inserting a provision that B2B supplies of electronic services (as defined) will not be subject to the new VAT rules and they remain taxable by Korean business customers under the reverse charge mechanism.

Read all about it HERE.

For further details on the above and other proposed tax changes please refer to PwC Korea’s newsletter. Alternatively, please contact Changho Jo of PwC Korea or Andras Salanki of PwC Zurich.

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