What are required for your reimbursement claming on expense In Korea？

INTRODUCTION

Thank you for taking time to read this solution for the information you would probably need to know what are required for your reimbursement claiming on business expense you paid on the company behalf in Korea.

Hope the following Q&A clarifies your questions mark related to expense reimbursements.

Q: Will the expense be taken as taxable income of mine?

A: As long as professionals can substantiate as business expenses with valid receipts and the amount is considered reasonable, such reimbursement of actual cost shall not be treated as taxable income to the employee concerned.

Per diem allowance is also treated non-taxable income to employees in Korea provided that such per diem allowance is within the reasonable range and substantiated as business related expense.

Q: While asking VAT invoice for the Merchant, are the VAT invoice supposed made out to myself as individual or Horizons as Company.

A: Regarding the information of the recipient on VAT invoices, it is required that the recipient be Horizons Global Technology Korea Ltd. /호라이즌스글로벌테크놀로지코리아 유한 회사 (“Company”). This will facilitate the proof of business relevance for the Company as mentioned in the answer to last questions. Hence, it's crucial for our most-valued employee to understand please collect VAT Invoice to Horizons rather than to yourself as individual.

Q: Any requirement onto the Per diem allowance or travel expense reimbursement?

A: You must submit valid receipts to the company when they request for per diem allowance or expense reimbursement. All business-related expense over Won 30,000 per payment should be substantiated by valid receipts (VAT invoice, VAT exempted invoice, credit card receipt, or cash receipts) as required by the CITL in Korea.

Below is the summary of type of valid supporting receipts by expense type for your reference.

Expense type	Minimum threshold for valid supporting receipt requirements	Type of supporting receipts
General expense	Won 30,000 or more per expenditure	All general expenses of Won 30,000 or more should be supported by valid supporting receipts. For general expenses, the credit card receipts paid by the “personal” credit card are acceptable under the CITL.
Entertainment expense	Over Won 30,000 or more per expenditure (threshold increased from Won 10,000 to Won 30,000 from Jan 1, 2021)	All entertainment expenses over Won 30,000 thresholds should be supported by valid supporting receipts. An exception applies for cash gifts for Congratulation/Condolence to business partners/customers, which do not need to be supported by valid supporting receipts if the amount is Won 200,000 or less. For entertainment expenses, the credit card receipts paid by the “personal” credit card is not acceptable under the CITL. Entertainment expenses should be supported by either “corporate” credit card receipts or VAT tax invoices ONLY.

NB for both Employee and Expense Approver in Korea.

If you lost the valid receipts or figure out the employee didn't manage to submit expense claiming report for with valid receipts, please contact [email protected] for help.

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South Korea

What are required for your reimbursement claming on expense In Korea？