[Korean Tax Common Sense Series 10] If business expenses exceed 30,000 won, tax documentation changes

Tax Documentation Changes When Expenses Exceed 30,000 KRW

If your expense exceeds 30,000 KRW, it is safer to receive a credit card slip, cash receipt (for expense proof), or tax invoice instead of a simplified receipt.

Key Summary

• The standard is 30,000 KRW per transaction. Above this amount, designated proof is required.
• A combination of credit card slips, cash receipts for expense proof, and tax invoices is recommended.
• Classifying them today reduces the risk of omissions and penalties during year-end/VAT reporting.

Terms Explained Simply

• Simplified Receipt: A general receipt issued by a store (lacks detailed VAT/business registration information).
• Cash Receipt for Expense Proof: A cash receipt issued with a 10-digit business registration number (strong for tax recognition).
• Credit Card Sales Slip: A slip automatically generated upon credit card payment (electronic/paper).
• Tax Invoice: An electronic receipt used for transactions including VAT (between businesses).
• External/Internal Proof: Documents provided by the store/records created by me (external proof takes precedence).

30-Second Check

• Is this expense 30,000 KRW or more?
• If paid in cash, did you receive a cash receipt with a 10-digit business registration number?
• If paid online, did you save the electronic slip/tax invoice file?
  👉 If you have 3 or more "Yes" answers, you are closer to the "Safe Proof Zone."

Points of Change

• Less than 30,000 KRW: May be recognized with a simplified receipt and transaction details alone.
• 30,000 KRW or more: A simplified receipt alone is insufficient (designated proof is mandatory).
• Classifying today can result in differences of tens to hundreds of thousands of won in potential refunds.

Case Comparison

• Scope of Application: Less than 30,000 KRW (Case A) vs. 30,000 KRW or more (Case B)
• Key Difference: Case B requires one of the following: credit card slip, cash receipt for expense proof, or tax invoice.
• Actual Impact: In Case B, if only a simplified receipt is received, the recognition of expenses may be reduced, potentially leading to smaller refunds.

What to Do Now

1. Divide today's expenses into two groups (below/above 30,000 KRW).
2. Mark items in the "30,000 KRW or more" list that only have simplified receipts.
3. Request a re-issuance of a cash receipt for expense proof (10-digit business registration number) from the store.
4. Save credit card transactions as electronic slips (PDF).
5. Organize folders using the structure: `YYYY-Business/Card_Cash_TaxInvoice`.

Checklist · Transaction Amount

Practical Example

• A: Cafe cash payment 29,000 KRW + simplified receipt → File under "Below 30,000 KRW" (with screenshot of transaction details).
• B: Material cash payment 50,000 KRW + only simplified receipt available → Request re-issuance of a cash receipt for expense proof from the store and replace it.

Confusing Points

• "Simplified receipts are always fine" → For amounts of 30,000 KRW or more, designated proof is required.
• "Bank transfer details are sufficient" → Transaction details are supplementary; external proof takes precedence.
• "Foreigners are an exception" → The same regulations apply.

Next Article

• Simplified receipts prevent VAT refund of 10% (How to change to alternative proof)