I. Legal context and reform requirements

In recent years, Korea has been one of the pioneering countries in the digital transformation of tax administration. Electronic Invoicing System (전자세금계산서) has been implemented since 2011 for enterprises and has been gradually extended to individual businesses. However, the management model has still experienced delays in the submission of data to the tax authorities, creating difficulties in the timely detection and control of tax evasion. To address this shortcoming, the government has announced a policy to shorten the deadline for submitting electronic invoices, effective from July 1, 2025.

II. New regulatory provisions

Under the new policy, entities required to issue electronic invoices must submit such invoices to the National Tax Service (NTS) within one day from the date of issuance. Previously, the deadline was the 15th day of the following month. This shortened timeframe reflects the trend toward real-time VAT compliance. For example, if an invoice is issued on August 5, 2025, the deadline for submission to the NTS will be August 6, 2025. This new regulation requires enterprises to automate the processes of invoice issuance and data transmission within their internal systems.

III. Scope of application

The policy shall first apply to:

• Corporate enterprises (법인사업자), regardless of size.
• Individual businesses (개인사업자) with an annual turnover of KRW 10 billion or more.

However, in line with the roadmap of gradually lowering the revenue threshold over the past ten years (from KRW 1 billion in 2012 to KRW 80 million in 2024), it is likely that this regulation will also apply to individuals with lower revenues as from 2026 onwards. Therefore, medium-sized business households are advised to promptly prepare appropriate systems.

IV. Legal basis 

This policy will be institutionalized through the amendment of:

• Value-Added Tax Act (부가가치세법)
• Enforcement Decree of the Value-Added Tax Act (부가가치세법 시행령)
• Enforcement Rule of the Value-Added Tax Act (부가가치세법 시행규칙)

At present, the draft amendment has been released by the Ministry of Strategy and Finance for public consultation, is expected to be adopted in the first quarter of 2025, and to enter into force in July 2025.

V. Objectives and impacts

The primary objective is to enhance real-time tax supervision capacity, shorten delays in the collection of transaction data, and thereby reduce tax losses and invoice fraud. At the same time, enterprises will be compelled to upgrade their technological capabilities, shifting from manual processing to the full automation of invoicing procedures. In the long term, this serves as the foundation for a nationwide electronic invoicing system that can be integrated with refund systems, risk analysis, and corporate governance.

VI. Sanctions and incentives

Enterprises that fail to submit invoices within the prescribed deadline shall be subject to penalties as follows:

• Late submission: a fine equal to 0.1% of the invoice value
• Failure to submit: a fine equal to 0.3% of the invoice value

Conversely, to encourage compliance, the government allows a tax deduction:

• KRW 200 per invoice, up to a maximum of KRW 1 million per year, for enterprises that submit invoices within the prescribed deadline.

VII. Corporate response and preparations

Enterprises are required to:

• Upgrade their e-invoicing software with API integration to the HomeTax system;
• Ensure the validity of digital signatures and compliance with the XML format;
• Train accounting personnel, operate the system within the prescribed deadlines;
• Review the entire invoicing process to ensure compliance with the new submission timeframe.

VIII. Prospects and practical implications of the policy on shortening the electronic invoice submission deadline

The policy on shortening the electronic invoice submission deadline, effective from July 1, 2025, constitutes a systemic adjustment in tax administration in Korea, aimed at enhancing the effectiveness of tax control and improving the transparency of transaction data. The requirement to submit invoices within one day of issuance reflects the objective of implementing real-time VAT compliance, thereby mitigating the risks of fraud and tax revenue losses.

From a legal perspective, this policy clarifies the obligation to submit electronic invoice data within a shortened timeframe, thereby establishing a legal basis for the timely supervision of business transactions. This mechanism contributes to the improvement of the value-added tax system while facilitating subsequent risk analysis, audits, and inspections.

From a practical perspective, the regulation imposes requirements on enterprises to enhance their information technology capacity and to automate the processes of issuing and submitting electronic invoices. This shifts accounting and tax operations from manual and delayed methods to an integrated, real-time model. Accordingly, the policy affects not only the tax authorities but also directly impacts the internal operations of enterprises.

From the perspective of state administration, the shortening of the invoice submission deadline enables tax authorities to collect data in a timely manner, enhance their ability to detect violations, and minimize risks of revenue loss. At the same time, it establishes a legal basis for the application of new technologies in tax monitoring and data analysis, thereby contributing to the modernization of the national tax system.

In summary, the policy on shortening the electronic invoice submission deadline plays a pivotal role in the modernization of tax administration, ensuring both effective control and the advancement of technological systems supporting enterprises and tax authorities.

IX. About NYLA – Korean Legal Office 

■ NYLA – Your Trusted Legal Partner in Korea

At NYLA, we understand that the success of foreign businesses in Korea requires not only a solid business strategy but also reliable legal support. With a team of experienced Korean attorneys and legal professionals, NYLA provides tailored legal services for companies, investors, and individuals operating or planning to establish a presence in Korea.

We support our clients throughout the entire business journey with comprehensive services, including:

• Legal consultation on company establishment, taxation, and immigration;
• Advice on commercial real estate, franchising, and product distribution;
• Support in human resources, marketing, and business strategy.

In addition to legal advisory, NYLA also represents clients in civil litigation cases related to business, labor, marriage, family, and inheritance to ensure their rights and interests are fully protected.

■ Contact NYLA

If you’re a foreign business or individual looking for a reliable legal partner in Korea, NYLA is here to help. We are committed to delivering effective, practical, and personalized legal solutions for every client.

With a proven track record of assisting hundreds of international clients, our team is equipped to help you navigate complex legal challenges—whether it’s commercial disputes, contract issues, or foreign investment guidance.

Don’t let legal matters hold you back. Let NYLA be your trusted guide in the Korean market.

■ Get in touch with NYLA for expert legal support

Website: https://nylakoreanlegal.com/ FB: https://www.facebook.com/nyla.koreanlegal  Tiktok: https://www.tiktok.com/@nylakoreanlegal  Youtube: https://www.youtube.com/@NYLA-xd8qx Email:  info.NYLAkoreanlegal@gmail.com   SĐT: +82 10-3415-7859