Tax invoice issuance and capital expenditure(자본적 지출)

"A", a building repair contractor, must issue a cash receipt or tax invoice to the homeowner "B" who requested repairs after renovating a house. If "A" cannot issue a cash receipt and "B" is not registered as a business, a tax invoice can be issued using "B's" resident registration number. Since "B" is not registered as a business, he/she cannot receive a VAT refund with the tax invoice received. If this repair work qualifies as a capital expenditure, "B" can reduce the taxes that he/she must pay when selling this house by recognizing this tax invoice as a cost.

 

Capital expenditure 자본적 지출

Costs required to realistically increase the value of a building

1. Renovation to change the original purpose (such as veranda-related construction or expansion work on an apartment)

2. Installation of elevators or air conditioning and heating devices (boilers, etc.)

3. Installation of emergency facilities such as those in buildings

4. Restoration of assets destroyed or damaged due to disasters, etc., which have lost their original value for use

5. Other improvements, extensions, or additions similar to those in items 1 to 4

 

Therefore, if you have carried out work such as installing a boiler, you can request the issuance of a tax invoice and process the expenses when you sell your house in the future. The documents that need to be kept include the construction contract, transaction history of the construction cost transfer, tax invoice, cash receipt, credit card sales slip, etc.

 

Revenue expenditure 수익적 지출

Costs required to restore a building to its original state or maintain its efficiency

 

Expenses other than work that qualifies as capital expenditure cannot be recognized as necessary expenses. Many construction companies often demand that they be paid in cash without VAT. However, such acts can lead to tax evasion. Although the construction cost of 10% may seem expensive at first, we must not allow transactions that facilitate tax evasion by paying VAT properly.

 

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