[Korean Tax Common Knowledge Series 9] Complete tax registration within 20 days of opening your business.

Register for tax purposes within 20 days after opening your business

A late registration may result in penalty taxes on your first sales.

Key Summary

• It is safest to apply for business registration within 20 days of opening your business.

• You can also do it online (Hometax), and it's quick if you have the necessary documents.

• If you note down your address, business type, and tax classification, subsequent tax filings will be much easier.

Terms Explained Simply

• Business Registration: The process of notifying the tax office that you are starting a business and receiving a number.

• Opening Date: The actual date you started your business, such as the date of a contract, first sale, or issuing a receipt.

• Business Code: A numerical code representing your type of business (e.g., retail, restaurant).

• Tax Type: Choice between simplified or general taxation. The advantage varies depending on sales and transaction parties.

• Lease Agreement: Document proving your business address (can sometimes include home office).

30-Second Check

• Did you have your first contract or sale within the last 20 days?

• Do you have your business address and a lease agreement (or proof of use)?

• Have you prepared your Alien Registration Card/Passport and a bank account in your name?

  Account

  
  👉 If you have 3 or more of these, you are close to being ready for registration.

Points of Change

• Registering on time reduces the risk of penalty taxes and streamlines subsequent VAT filings.

• Accurately recording your address, business type, and tax classification at the outset minimizes corrections and amendments later.

• You can immediately respond if your business partners (B2B) request a copy of your business registration certificate.

Case Comparison

• Scope of Application: Renting an office space vs Home Office (Combined Residence)

• Key Difference: Proof of address is either a copy of the lease agreement or proof of residence use.

• Actual Impact: Home office use may require additional explanatory documents, leading to more requests for supplementary information.

What to Do Now

1. Scan Documents: Alien Registration Card/Passport, Lease Agreement, Bank Account Copy, Business Type Notes.

2. Sign up for Hometax & Authenticate: Choose the authentication method that works for you (Joint, Financial, Simple).

3. Navigate to Application: Hometax → Application/Submission → Business Registration Application (Individual).

4. Fill in Key Details: Opening Date (actual start date), Address, Business Code, select Tax Type (Simplified/General).

5. Confirm Submission & Save Proof: Save the submission receipt and registration certificate (once issued) as PDFs.

Practical Examples

• A: Online retail shop (rented office) → Documents match, clear address → Registration certificate issued, commence business.

• B: Translation freelancer (home office) → Additional document explaining residence use → Registration completed after supplementary submission.

Confusing Points

• "Foreigners cannot register" → It is possible within the scope of your residency status.

• "Only offline registration is possible" → Online application via Hometax is available.

• "I can register later when I have more time after opening" → It is safer to apply within 20 days of opening.

Next Article

• The classification into simplified/general taxation changes at ₩104 million in annual sales (Tax Type Selection Guide).