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The Curious Case of the Simplified Taxpayer: A Tale of Taxes, Pubs, and Misadventures

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Once upon a time, in the bustling world of business and taxes, there was a rumor as persistent as the smell of a good coffee in the morning – "Simplified taxpayers don't pay taxes!" they said. Well, let's spill the beans and see how much truth is in this brew.

In the land of Korea, a simplified taxpayer, known as '간이사업자', is a magical creature that operates under a certain threshold (as of 2023, 80,000,000 KRW, it's raised to 104,000,000won in 2024FY)). These business beings can issue tax invoices only if their sales soar above 48,000,000 KRW. As the year ends, a peculiar dance begins – many businesses close their doors only to reopen them anew on January 1st, in hopes of retaining this coveted status.

Now, these simplified taxpayers have a special power – they only need to declare and pay value-added tax (VAT) once a year, by January 25th. If their sales are below 48 million won, they're blessed with VAT exemption, and if they exceed it, they pay a minimum of 3%, depending on their business type.

But beware, dear reader, for not all that glitters is gold. Some fall for the siren song that becoming a simplified taxpayer means never having to pay taxes. Alas, this is not the case, and such beliefs can lead to unfortunate consequences.

Take, for example, Miss A from South Africa, who opened a Pub (beer + food) in Busan. She paid a handsome sum of 100 million won for interior and kitchen costs. Had she been a regular taxpayer, she could have claimed a 10% VAT refund on these initial expenditure. But alas, the interior designers, cunning as foxes, often demand an extra 10% VAT under the guise of issuing a tax invoice.

In this tale of fiscal caution, if you don't have a tax invoice, later recognition of these expenses becomes a distant dream. However, if a regular taxpayer's annual sales (converted over 12 months) don't reach the 80 million won mark, they can transform into a simplified taxpayer.

The moral of the story? If you're venturing into the realm of personal business, seek the wisdom of experts from the very beginning. They'll help you navigate the treacherous waters of taxes and prevent your ship from sinking into the abyss of financial woes.

And with that, we close the ledger on today's tale. Remember, in the world of taxes, it's better to be safe than sorry – and always read the fine print!


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