How it is calculated
- Split from total: VAT = total × 10 ÷ 110, supply value = total − VAT
- Add to supply value: VAT = supply value × 10%, total = supply value + VAT
For example, if a customer paid 33,000 KRW, VAT is 3,000 KRW and the supply value is 30,000 KRW. The other way round, an item with a 30,000 KRW supply value should be charged at 33,000 KRW.
| Total | Supply value | VAT |
|---|---|---|
| 11,000 KRW | 10,000 KRW | 1,000 KRW |
| 33,000 KRW | 30,000 KRW | 3,000 KRW |
| 55,000 KRW | 50,000 KRW | 5,000 KRW |
| 110,000 KRW | 100,000 KRW | 10,000 KRW |
| 1,100,000 KRW | 1,000,000 KRW | 100,000 KRW |
FAQ
How do I get the supply value from a VAT-inclusive amount?
Divide the total by 1.1. If it does not come out to a whole won, the usual way is to work out the VAT first (total × 10/110), handle the fraction, then subtract it from the total to get the supply value.
Why isn’t VAT just 10% of the total?
Because the total already includes VAT. 10% of 11,000 KRW is 1,100 KRW, but the real VAT is 10% of the 10,000 KRW supply value: 1,000 KRW.
Do simplified taxpayers charge 10% VAT separately?
Their prices are treated as VAT-inclusive too, but the tax they actually pay is much lower because industry value-added rates apply. Estimate what you will actually pay with the Korean VAT Estimator.
Are Smart Store and Coupang prices VAT-inclusive?
Yes. Prices shown to consumers include VAT, so when you check margin from the price you need to take VAT out. The Margin calculator does this for you.
Related: VAT guide for simplified taxpayers