South Korea VAT Reporting Rules for Foreign Digital Platforms & Gateways – Effective July 2025

In March, the South Korean government amended the VAT Law to address the uncertainties regarding the reporting obligations of foreign or non-resident intermediary service providers. Therefore, starting July 1, 2025, foreign intermediary service providers must submit monthly transaction details to the Korean tax authority by the 15th of the month following each calendar quarter.

Impact of Amended Rules

Under Article 75 of the Korean VAT Law, certain digital intermediary services, such as an online marketplace platform service, a payment gateway service provider, a digital financial service provider, or a specialized foreign exchange dealer, must submit monthly transaction details to the Korean Tax Authority. The details refer to information regarding the underlying transaction party, the number of transactions, the transaction amount, and similar data.

However, whether the same obligation applies to foreign digital intermediary services was unclear. Therefore, the Korean regulatory bodies decided to amend Article 75 and undoubtedly state that starting July 1, the exact reporting requirements will apply to foreign taxable persons providing these services.

Additionally, the amendments specify that the reporting does not include goods or services supplied by foreign sellers through digital platforms. Therefore, the purpose of the requirement is to collect transaction data from the service providers, not sellers, to verify the sales data of the underlying suppliers.

Those who fail to meet these requirements, meaning they do not file the required information or do not file it on time, will face penalties of up to KRW 20 million (around USD 14,300).

Conclusion

With the amended Article 75, the Korean government removed the legal uncertainty and underlined that the same rules apply for domestic and foreign digital intermediary services. Moreover, excluding the transactions involving goods or services supplied by foreign sellers narrows the scope to focus on intermediary roles, more specifically digital platforms, rather than cross-border supply chains, reflecting a targeted regulatory approach.

Source: KPMG