💡 What is more advantageous between registering as a business owner and being a 3.3% freelancer?
Many people wonder which is more beneficial in terms of tax benefits, whether it's working as a freelancer and contracting with other businesses or individuals, or registering as a business owner and working.
In general, both business owners and freelancers earn business income, but there are differences in terms of taxes and business characteristics. Here's a table that summarizes the differences:
| Business Owner
| Freelancer
|
Issuance of Tax Invoice | Possible | Not Possible
|
Card Terminal, PG | Can be activated
| Cannot be activated
|
Value Added Tax Refund
| 10% refund of purchase amount (based on general taxpayers)
| None |
Government Support Funds such as Loss Compensation
| Available for business owners | Only minimal support available for freelancers |
Accounting Fees
| Can be supported
| Fully borne by freelancer
|
Scope of Expense Recognition | Wide | Relatively narrow
|
Labor Cost Reporting (Outsourcing, etc.)
| Easy
| Difficult
|
Labor Cost Subsidy | Up to KRW 9.6 million per year
| None
|
Tax Reporting
| Simple tax payment and benefits up to 100% for small amounts
| Tax burden is high for large amounts
|
You can scroll the table left and right on mobile 😃
One of the biggest advantages of registering as a business is that you can receive appropriate certification. You can receive various government grants, including labor cost subsidies, and receive partial support for accounting fees.
In particular, if you meet the requirements, you can save up to 100% of your taxes, which is a significant benefit.
Freelancers can be considered to have relatively less to worry about since they do not need to issue tax invoices or install card terminals and do not need to report value-added tax. However, since it is difficult to distinguish between living expenses and business expenses, it can be difficult to reflect expenses compared to business owners.
Support funds and tax benefits are also much less.
💡 What is more advantageous between registering as a business owner and being a 3.3% freelancer?
Many people wonder which is more beneficial in terms of tax benefits, whether it's working as a freelancer and contracting with other businesses or individuals, or registering as a business owner and working.
In general, both business owners and freelancers earn business income, but there are differences in terms of taxes and business characteristics. Here's a table that summarizes the differences:
Issuance of Tax Invoice
Possible
Card Terminal, PG
Scope of Expense Recognition
Wide
Labor Cost Subsidy
You can scroll the table left and right on mobile 😃
One of the biggest advantages of registering as a business is that you can receive appropriate certification. You can receive various government grants, including labor cost subsidies, and receive partial support for accounting fees.
In particular, if you meet the requirements, you can save up to 100% of your taxes, which is a significant benefit.
Freelancers can be considered to have relatively less to worry about since they do not need to issue tax invoices or install card terminals and do not need to report value-added tax. However, since it is difficult to distinguish between living expenses and business expenses, it can be difficult to reflect expenses compared to business owners.
Support funds and tax benefits are also much less.