Here are the cases where input tax deduction is not allowed 🙅🏻♀️:
💡 What are some reasons for disallowing input tax deduction?
- When a taxpayer fails to receive a tax invoice or when required details are missing or poorly recorded.
- When a taxpayer fails to submit a summary of tax invoices by supplier when reporting VAT or when the summary is poorly recorded.
- When the input tax is not related to the taxpayer's business.
- When the input tax is related to the purchase, lease, or maintenance of a passenger car with eight or fewer seats.
- When the input tax is related to entertainment expenses.
- When the input tax is related to a tax-exempt business or land.
- When the input tax is related to purchases made before registering as a taxpayer (if the taxpayer registers within 20 days after the taxable period).
💡 Are all passenger cars with eight or fewer seats subject to disallowed input tax deduction?
No, they're not all subject to disallowed input tax deduction! 🙅🏻♀️
- Passenger cars with nine or more seats (including vans and buses).
- compact car with an engine displacement of 1,000cc or less.
- truck are eligible for input tax deduction 🙆🏻♀️.
However, please note that costs related to a vehicle registered under a spouse's name are not eligible for deduction!
💡 If input tax deduction for VAT is not allowed, can it still be reflected as a business expense when reporting aggregate income tax?
If appropriate evidence is provided, it can be reflected as a business expense when reporting aggregate income tax 🙆🏻♀️.
For example, if a taxpayer purchased an item for 1,100 won including VAT of 100 won:
- If the input tax is deductible:
The input tax of 100 won is reflected as a deductible input tax when reporting VAT. The remaining 1,000 won can be reflected as a business expense when reporting aggregate income tax.
- If the input tax is not deductible:
The entire cost of 1,100 won can be reflected as a business expense when reporting aggregate income tax.
Here are the cases where input tax deduction is not allowed 🙅🏻♀️:
💡 What are some reasons for disallowing input tax deduction?
💡 Are all passenger cars with eight or fewer seats subject to disallowed input tax deduction?
No, they're not all subject to disallowed input tax deduction! 🙅🏻♀️
However, please note that costs related to a vehicle registered under a spouse's name are not eligible for deduction!
💡 If input tax deduction for VAT is not allowed, can it still be reflected as a business expense when reporting aggregate income tax?
If appropriate evidence is provided, it can be reflected as a business expense when reporting aggregate income tax 🙆🏻♀️.
For example, if a taxpayer purchased an item for 1,100 won including VAT of 100 won:
The input tax of 100 won is reflected as a deductible input tax when reporting VAT. The remaining 1,000 won can be reflected as a business expense when reporting aggregate income tax.
The entire cost of 1,100 won can be reflected as a business expense when reporting aggregate income tax.