VAT Calculation Guide — How to Split Supply Price and Tax Correctly
Last updated: April 2026
VAT (Value Added Tax) in Korea is 10% and is added to the supply price (공급가액). The confusion often comes from which direction you are calculating: adding VAT onto a price, or working backwards from a VAT-included total. Here is a clear breakdown.
The two directions of VAT calculation
Direction 1: Supply price → VAT-included total
You know the pre-tax price and need the total a customer pays.
Total = Supply price × 1.1
VAT amount = Supply price × 0.1
Example: Supply price 100,000 won → Total 110,000 won (VAT 10,000 won)
Direction 2: VAT-included total → Supply price
You know the total paid and need to separate the VAT portion.
Supply price = Total ÷ 1.1
VAT amount = Total ÷ 11
Example: Total 110,000 won → Supply price 100,000 won (VAT 10,000 won)
Common scenarios
- Freelancer issuing a tax invoice: Your quote is 500,000 won. The tax invoice shows supply price 500,000 won + VAT 50,000 won = total 550,000 won.
- Business receiving a receipt: You paid 55,000 won at a restaurant. The deductible supply price is 55,000 ÷ 1.1 = 50,000 won. VAT portion: 5,000 won.
- Online seller pricing a product: You want the customer to pay 33,000 won total. Your supply price for the tax invoice is 33,000 ÷ 1.1 = 30,000 won.
Frequently confused terms
| Korean term | Meaning |
|---|---|
| 공급가액 | Supply price — the pre-tax price |
| 세액 | Tax amount — the 10% VAT |
| 합계금액 | Total amount — supply price + VAT |
| 부가세 포함가 | VAT-inclusive price — same as 합계금액 |
| 부가세 별도 | VAT excluded — VAT will be added on top |
Who pays VAT?
VAT is ultimately paid by the end consumer, but collected and remitted by businesses. If you are a registered business (사업자), you collect VAT from your customers and pay it to the tax office. If you are a general consumer, the price you pay at the register already includes VAT.
Individual freelancers and sole proprietors (개인사업자) issue tax invoices (세금계산서) and are responsible for filing VAT returns twice a year.
Calculate VAT quickly and accurately.
Use the VAT Calculator Tool