Digital transition replaces paper receipts with electronic tax invoices and e-receipts

The National Tax Service is promoting electronic tax invoices and e-receipts to simplify tax evidence management for businesses and consumers. Individual business owners with a previous year's supply value under 300 million won can receive a tax credit of 200 won per transaction, up to 1 million won annually, for meeting legal requirements.

The inconvenience of manually writing paper tax invoices to deliver to clients and separately storing issued receipts is disappearing through digital transformation. According to information provided by the National Tax Service, both businesses and consumers can more easily manage tax evidence and payment history by utilizing electronic tax invoices and e-receipts.

200 won tax credit per transaction... Efficient issuance via Home Tax

Businesses can issue electronic tax invoices through the National Tax Service Home Tax, Son Tax, or registered electronic tax invoice issuance agencies. When using Home Tax, issuance is completed after entering the client's business registration number, trade name, supply value, value-added tax, and date of preparation, followed by an electronic signature. If the buyer's email address is entered, the invoice is automatically sent to the client, and the issued details are automatically transmitted to the National Tax Service, allowing for simple reporting of total amounts during value-added tax filing without separate manual entry. Even if an electronic tax invoice is issued through a different system, it can be searched on Home Tax once the transmission to the National Tax Service is complete.

Convenience features are also provided for businesses with frequent transactions. Business time can be reduced by using the "batch issuance" function, which allows multiple tax invoices to be processed at once each month, and the "copy issuance" function, which allows existing details to be loaded and modified when conducting repetitive transactions with the same client. For businesses with many repetitive transactions, these functions can save time and effort. While tax invoices must in principle be issued when goods or services are supplied, a "monthly aggregate tax invoice" system is also in operation, allowing issuance by the 10th of the month following the transaction if requirements are met.

Tax credit benefits are also available. If an individual business owner with a supply value (including tax-exempt supply value) of less than 300 million won in the previous year meets legal requirements to issue and transmit electronic tax invoices to the National Tax Service, they can receive a tax credit of 200 won per transaction, up to a maximum of 1 million won annually. However, not all businesses are subject to mandatory issuance. Corporations and individual business owners with a total supply value of 80 million won or more in the previous year are required to issue electronic tax invoices, and caution is needed as penalties may be imposed for violations or delays. Therefore, it is important to check mandatory issuance status in advance and comply with issuance deadlines.

E-receipts: Convenient payment history management without loss concerns

From a consumer perspective, it is advantageous to use e-receipts instead of paper receipts. Since e-receipts allow payment history to be checked via mobile apps or text messages, they prevent situations where difficulty arises in exchanging goods or proving expenditures due to the loss of paper receipts. Since the government signed an agreement with major retailers in 2019 to create an environment without paper receipts, it has been building an environment where e-receipts can be checked via apps or texts not only at large retailers but also at local shops.

The greatest advantage of e-receipts is that payment history can be easily searched at any time and no physical storage is required. This resolves the inconvenience of being unable to find a paper receipt when needed after discarding it, and consumers can use this to manage spending patterns and easily secure payment proof. Recently, systems have been established to allow e-receipts to be checked via apps or texts at various local shops in addition to large retailers.

"E-receipts are not cash receipts"... Points of caution

The most important thing for consumers to note when using e-receipts is that they do not completely replace cash receipts. An e-receipt is merely a means of receiving payment details in digital form instead of paper, and its nature is different from a "cash receipt" used for income deductions or tax evidence following cash payments. An e-receipt is the receipt of transaction details in electronic form, whereas a cash receipt is evidence used for things like income deductions as tax data resulting from cash payments.

If payment is made in cash, receiving an e-receipt should not be assumed to mean that a cash receipt has been automatically issued. To receive an income deduction, one must verify whether a cash receipt was separately and properly issued. In other words, an e-receipt is a tool to assist in the convenience of checking payment details, while actual evidence for tax credits or expense processing must be managed through appropriate tax documents (cash receipts, tax invoices, etc.) corresponding to the payment method.

For businesses, rather than relying solely on the convenience of digital receipts, it is essential to clearly distinguish and manage the tax evidence documents required to be recognized as business expenses by payment method. Digital receipts are going beyond simply moving paper receipts to smartphone screens and are becoming a new standard for more conveniently checking and managing purchase history.

Source: original video (YouTube)