Reclaiming Korean VAT as a Foreign Business: The Refund Route Under Article 107(6)

A practical guide for international associations, exhibitors and overseas head offices that incur costs in Korea without a registered place of business there.

If your organization held a conference in Seoul, exhibited at a Korean trade show, or ran advertising through Korean media, you paid 10% VAT on the venue, the hotel rooms, the advertising and the telecoms.

Most foreign organizations simply absorb that 10% as a cost, on the basis that a business without Korean registration has no way to recover it. That is half right — you cannot credit the VAT, but you may be able to claim it back. Korean law provides a separate refund route for exactly this situation.

What Is the Foreign Business VAT Refund?

Article 107(6) of the Restriction of Special Taxation Act allows a foreign corporation or non-resident with no place of business in Korea to obtain a refund of VAT borne on goods and services purchased in Korea for business purposes. The eligible expense categories and the procedure are set out in the Enforcement Decree, the Enforcement Rule and National Tax Service public notices.

What surprises most finance teams: no Korean business registration is required. The refund claim stands on its own.

Why Do So Few Foreign Organizations Recover It?

A Korean business offsets input VAT against its output VAT. A foreign business has no Korean output VAT, so there is nothing to offset against.

So nothing gets done, and the 10% goes into the event budget as a cost. The first half of that is correct — the credit mechanism is unavailable. But the refund mechanism is a separate procedure and remains open.

How Does the Refund Actually Work?

The claim runs through a Korean tax representative, but the refund belongs to you:

• The Korean supplier — venue, hotel, advertising, telecoms — issues a tax invoice charging 10% VAT
• Your organization bears that VAT with nothing to offset it against
• A Korean tax representative files the refund claim on your behalf
• The tax authority reviews the requirements and pays the refund

What Determines Whether a Claim Succeeds?

Not the legal analysis. The statute and the tax authority's interpretations are settled, and disputes on the law itself are rare. Three practical points decide the outcome.

First, whose name is on the tax invoice. The recipient shown on the tax invoice has to be your organization. Invoices issued in the name of a PCO, a local partner organization or an individual participant do not qualify. This is the first test, and the one most often failed.

Second, the expense category. Only the categories specified in law are eligible. An event budget has to be split between eligible and ineligible items.

Third, the filing deadline. A statutory deadline runs by reference to the year in which the expense was incurred, and once it passes there is no alternative relief. Events held late in the year leave the shortest preparation window.

Name and category can be shaped before an event and are difficult to change afterwards. The deadline cannot be moved at all.

Is a Temporary Event in Korea Taxable?

The tax authority has issued an advance ruling on this point: where an organization with no place of business in Korea holds an event there on a temporary basis and collects registration fees, it has no Korean VAT liability, and the tax incurred on holding the event can be refunded.

The conclusion can differ depending on how the event is organized — a joint event with a Korean institution, or an event repeated annually, may be analyzed differently — so this needs to be confirmed case by case.

What Needs to Be Checked in Your Case?

Your jurisdiction. The refund applies on a reciprocal basis, so whether your home jurisdiction grants an equivalent refund to Korean businesses determines whether the route is available at all. This is the first thing to confirm.

Hosting alone, co-hosting with a Korean institution, or returning every year each affect both the tax liability position and the refund structure.

The contract structure and the state of your documentation. Whether contracts are held directly or routed through a PCO or partner organization determines how much of the VAT is recoverable.

Before the Event and After: Two Different Exercises

If the event is over, the work is selection: review the tax invoices you hold, identify those issued in your organization's name, and file within the deadline. For items issued in the wrong name, check with the supplier whether a corrected invoice can be issued.

If the event is ahead of you, the work is design: decide before signing which contracts sit in your organization's name and which items they cover. Structuring it correctly at the outset determines how much can be recovered.

A Thirty-Second Self-Check — One "Yes" Is Enough

Most foreign organizations with Korean expenditure answer yes to the first question.

• Are you planning a conference, seminar or exhibition in Korea, or did you hold one in the past year?
• When exhibiting at a Korean trade show, does your organization pay booth rental, hotel and advertising costs directly?
• Are hotel and telecoms costs for head office staff traveling to Korea paid in the organization's name?
• Do you place advertising with Korean media or platforms?
• Do you operate in Korea without a registered branch or representative office?

Only three things are needed to review the position.

First, the expenditure schedule or the budget. For a completed event, the expenditure schedule and the tax invoices issued. For an event still ahead, a budget showing items, amounts and suppliers.

Second, the contract structure. Whether contracts are held directly or routed through a PCO or partner organization.

Third, basic entity information. Your jurisdiction, and whether you hold any branch or office in Korea.

For a completed event, scans of the tax invoices alone are enough to identify which items are recoverable and in what amount.

What Is the Scale of This?

The figures below assume a four-day international conference in Seoul with 300 participants. They are illustrative.

With the contract structure designed in advance, roughly KRW 26 million is recoverable. Working from invoices already issued after an event, the recoverable amount in this example falls to around KRW 15 million. Without a claim, it is zero.

Actual amounts vary with the contract structure and the state of the documentation.

What If a Korean Participant Wants to Withhold Tax?

Korean companies and institutions paying registration fees sometimes raise corporate income tax withholding or VAT reverse charge before remitting.

Where there is no permanent establishment under the applicable tax treaty, corporate income tax is exempt. A certificate of residence and a short explanatory note for participating institutions will normally resolve it. If you cannot answer that question, they will withhold and pay you net.

Summary

For a foreign organization that has held, or plans to hold, an event in Korea, the sequence runs: confirm whether your jurisdiction meets the reciprocity requirement, split the expenditure between eligible and ineligible categories, check that the tax invoices are in your organization's own name, file the refund claim within the statutory deadline, and receive the refund.

Before an event, that sequence is the basis for designing the contracts. After an event, it is the basis for selecting from the invoices you already hold.

How Daewon Tax & Accounting Corp. Can Help

Daewon Tax & Accounting Corp.'s consulting team acts for international academic societies and associations, companies exhibiting at Korean trade shows, regional headquarters of multinational groups, overseas universities and research institutions, and international NGOs on foreign business VAT refund claims in Korea — from contract structuring before an event through to receipt of the refund.

Send us a budget or a schedule of Korean expenditure and we will review whether a refund is available and estimate the recoverable amount.

If you would like your Korean VAT position reviewed, please get in touch.

Daewon Tax & Accounting Corp. (대원세무법인)

20, Eonju-ro 129-gil, Gangnam-gu, Seoul  |  Tel: 02-3016-3800  |  Email: master@taxdaewon.co.kr

This article is general information, not tax advice for any specific taxpayer. Whether a refund is available, and in what amount, depends on the contract structure, the state of the documentation and the claimant's jurisdiction. The legislation and interpretations cited are current as at September 2026.