VAT Calculator
Calculate value-added tax by separating or combining supply price and tax
Input
Result
This calculator is for informational purposes only and should not be considered as financial advice. Actual values may vary.
What is VAT Calculator?
The VAT Calculator is a simple yet essential tool for businesses and individuals in Korea to compute Value Added Tax amounts quickly and accurately. Korea applies a flat 10% VAT rate on most goods and services. This calculator operates in two modes: forward calculation (adding VAT to a supply price to get the total) and reverse calculation (separating VAT from a total amount to find the supply price). In forward mode, VAT is calculated as Supply Price × 10%, and the total is Supply Price + VAT. In reverse mode, the supply price is Total ÷ 1.1, and VAT is the difference between the total and supply price. VAT is an indirect consumption tax collected at each stage of the production and distribution chain, ultimately borne by the final consumer. Businesses registered for VAT must issue tax invoices showing the supply price and VAT separately, file VAT returns, and remit the collected tax to the National Tax Service. Understanding VAT calculations is critical for accurate invoicing, expense reporting, and tax compliance. Whether you are a freelancer preparing invoices, a business owner managing accounts, or a consumer who wants to know the pre-tax price of a purchase, this calculator provides instant, precise results for all your VAT computation needs.
How to Use
- Select the calculation mode: add VAT to supply price, or separate VAT from total.
- Enter the amount and the supply price, VAT, and total will be shown automatically.
Tips & Best Practices
- When receiving quotes or invoices, always clarify whether the stated price includes VAT to avoid unexpected cost increases.
- Businesses should keep all VAT-inclusive receipts organized for quarterly VAT return filings to maximize input tax credits.
- Remember that certain items are VAT-exempt in Korea, including basic food items, medical services, education, and public transportation.
- For freelancers and sole proprietors, properly separating VAT on invoices is legally required and helps maintain clean accounting records.
- Use the reverse calculation mode when you see a total price and need to report the supply price and VAT separately on business documents.
Use Cases
Invoice Preparation
Calculate the correct VAT amount to include on tax invoices when billing clients for goods or services.
Receipt Analysis
Separate the supply price and VAT from a total receipt amount for expense reporting and accounting purposes.
Price Negotiation
Determine the actual pre-tax cost of a product or service when the quoted price includes VAT.
Tax Return Preparation
Quickly compute VAT amounts for multiple transactions when preparing quarterly VAT return filings.
FAQ
What is the Korean VAT rate?
The Korean VAT rate is 10%. VAT is 10% of the supply price.
How do I separate supply price and VAT from a total amount?
Divide the total by 1.1 to get the supply price, then subtract from the total to get the VAT.
What is Value Added Tax (VAT)?
VAT is an indirect tax levied on the value added at each stage of production and distribution. It is borne by the final consumer and collected by the business on behalf of the government.
What goods and services are VAT-exempt in Korea?
Basic food items, medical and education services, public transportation, and books/newspapers are VAT-exempt. No 10% VAT is charged on these items.
Is my financial data stored?
No, all calculations are performed in your browser and no financial data is sent to or stored on any server.
How often do businesses file VAT returns in Korea?
General taxpayers file confirmed returns twice a year in January and July, with preliminary returns in April and October. Simplified taxpayers file once a year in January.
Do all businesses need to charge VAT in Korea?
Most businesses must charge VAT. However, simplified taxpayers (annual revenue below a certain threshold) have reduced obligations, and some businesses providing exempt goods or services do not charge VAT at all.
Can individuals claim VAT refunds?
Korean residents generally cannot claim VAT refunds on personal purchases. However, foreign tourists can claim tax refunds on purchases over 30,000 won at participating stores through the tax-free shopping program.
What is the penalty for incorrect VAT calculations on invoices?
Issuing invoices with incorrect VAT amounts can result in penalties including additional tax assessments and fines of 1-2% of the supply price. It is important to calculate VAT accurately on every invoice.
Is VAT the same as sales tax?
They are similar but not identical. VAT is collected at each stage of production and distribution with input credits, while sales tax is typically collected only at the final point of sale. Korea uses the VAT system.
How do I handle VAT for exports?
Exports are zero-rated in Korea, meaning VAT is charged at 0%. Exporters can still claim input VAT credits on their purchases, effectively making exports VAT-free.
When are VAT returns due in Korea?
General taxpayers file confirmed returns by January 25 (for July-December) and July 25 (for January-June), with preliminary returns due in April and October. Simplified taxpayers file once annually by January 25.