Korea Business Tip – “What Are Some Things I Should Know About Small-Business Accounting in Korea?”
From talking with foreign small business owners in Korea (and based on questions I get by email all the time), I’ve been surprised how inaccessible the basics of small business accounting can be to outsiders, especially those of us from Western traditions where paying taxes in business seems a matter of course.
I’m not an accountant but I have faced my share of head-scratchers in running a business in Korea, and I recently prepared answers to questions I’ve received from others, as well as a few that seemed noteworthy enough to record in my notes after discussing with my accountant.
You can get full details at: “Answers to Questions about Accounting Services to Small Businesses in Korea”
Or, the following summarizes my answers.
Quick Answers to Eight Top Questions about Small Business Taxes and Accounting in Korea
- What do accounting services cost in Korea and what does a small business get from using a professional provider?
Costs start around W110,000/month and comes with tax reporting, advice and an interface with the tax authorities.
- How are the Korean and American tax approaches different?
The Korean tax system assumes non-compliance; the IRS assumes compliance.
- How do I evidence business transactions in Korea?
Cash receipt, tax invoice/receipt or credit card receipt.
- What do I do if I can’t get an officially recognized receipt?
Talk to your accountant.
- What if an individual pays me for business services? What are my receipt options if I don’t take credit cards or have a cash receipt machine?
Issue them a tax invoice/receipt if you want to do it the right way. (They won’t expect you to, though.)
- Why is it called a tax invoice/receipt? What is it? An invoice? Or a receipt?
- How do you handle business reimbursements to an individual?
- I use Quicken or QuickBooks. Any chance of finding an accounting service provider who can work with those files?
Additional Resources on KBC and Elsewhere about Marketing a Business in Korea
** Comments are always welcome. If you have additional insights or come across information here that you disagree with or that needs to be updated — or just want to know something — don’t hesitate to leave a comment and share your opinion/knowledge/question!