Refund on VAT paid if partner goes bankrupt(bad debts tax credits 대손세액공제)

If you have issued a tax invoice, paid the value-added tax, but have not received money from your business partner, you can get a refund of the already paid value-added tax through the bad debts tax credits 대손세액공제 system.

 

If you meet the conditions below, you can get a refund of the already paid taxes:

1. The debtor has gone bankrupt, undergone compulsory execution, been subject to criminal execution, terminated the business, died, disappeared, or gone missing.
2. Accounts receivable and notes, checks, etc. with a statute of limitations that has expired.
3. Claims that have been confirmed as irrecoverable.
4. Attachment claims for which the auction of the debtor's property has been cancelled.
5. Accounts receivable and notes outstanding for more than 6 months since the occurrence of bankruptcy, and small and medium-sized enterprises' accounts receivable.
6. Claims outstanding for more than 2 years from the collection date for small and medium-sized enterprises' accounts receivable and accounts receivable, excluding transactions with related parties.
7. Claims outstanding for more than 6 months from the collection date, with a total amount of KRW 300,000 or less.

 

You can check the electronic promissory notes received from the defaulted trading partner on the electronic promissory note site (https://www.unote.kr/), and the general promissory notes on the promissory note and check information site (https://www.knote.kr/). You can get your tax back by submitting a confirmation statement from the site or a check stamped with a default stamp to the tax office.

 

Unauthorized reproduction or redistribution prohibited.