South Korea proposes push of VAT liability onto credit card companies
In an effort to reduce VAT fraud – retailers under reporting VAT sales to foreign customers – the South Korean Ministry of Finance has proposed pushing the responsibility and liability of VAT onto credit card companies.
South Korean VAT is currently 10%.
A new VAT Bill is to be put forward later this year which will include the obligation for credit card companies to monitor retail sales through its cards, and charge VAT on top to their business vendors. It is estimated that this could raise over US$ 6 billion.