VAT Regime Comparison Calculator

VAT Regime Comparison Calculator helps estimate Korea-related VAT, input tax, refund, or prepayment scenarios in English.

VAT regime inputs

Simplified VAT payable

₩1,080,000

Industry ratio x 10%, less purchase credit.

General VAT payable

₩3,272,727

Output VAT less full input VAT credit.

Recommended regime

Simplified

Eligibility satisfied in this scenario.

Break-even purchase ratio

82.5%

Above this ratio, general VAT often improves.

Compares simplified VAT and general VAT with the Korean 2026 simplified-tax thresholds, industry value-added ratios, purchase-credit rule, and invoice flag. This English calculator calls the same pure tax calculation function used by the Korean page. Inputs and labels are translated; the formula is not replaced by a generic value-times-rate stub.

Related calculators

Simplified VAT vs general VAT regime calculator

This English page translates the Korean VAT regime comparison guide and keeps the same simplified-tax eligibility, industry value-added ratio, purchase-credit, invoice, and break-even logic.

Simplified VAT threshold

A simplified VAT taxpayer is generally available when prior-year sales are below KRW 104 million. Real-estate rental businesses and taxable entertainment places use the tighter KRW 48 million threshold.

Even when simplified VAT applies, VAT payment duty is exempt below KRW 48 million of annual sales. The calculator keeps this exemption separate from the eligibility threshold because the Korean source treats them as different tests.

Industry value-added ratios

Simplified VAT is not calculated as sales times a flat 10 percent. It uses sales times the industry value-added ratio times 10 percent, then subtracts a limited purchase credit.

The 2026 ratios in the Korean model include retail 15 percent, restaurant and manufacturing 20 percent, accommodation 25 percent, construction, transport, and professional services 30 percent, and real-estate rental 40 percent.

General VAT comparison

General VAT uses output VAT less input VAT, so it can produce a refund when documented purchases exceed taxable sales. Simplified VAT does not refund negative tax.

The Korean function also exposes a break-even purchase ratio. This is important because simplified VAT can look cheaper at low purchase ratios, while general VAT often becomes better when the business has heavy tax-invoice purchases.