MyAIDevelopment · Product · Operations notes

Registration · Mail-Order Sales

This is general information, not legal or tax advice. Rules change often, so verify with the official source or a licensed tax accountant (semusa) or lawyer before acting.

Business registration (saeopja deungnok) tells the tax office "I run this kind of business." Software businesses have little equipment, so it is easy to postpone, but there are deadlines and consequences.

When to Register

Exception: if you are preparing for a pre-founder support program, decide the registration date first. See document 09.

Choosing an Industry Code

The industry code (eopjong code) affects expense ratios, eligibility for tax relief and statistical classification. Choose it based on how revenue is actually earned.

Revenue model Industry to consider (examples) Notes
Build and sell or subscribe your own app or SaaS Application software development and supply Commonly cited as code 722000. Verify on Hometax
Custom development for clients Computer programming services, etc. Verify on Hometax
Selling goods online E-commerce retail (525101) NTS guide for online businesses
Revenue from video platforms Media content creation (921505), one-person media content creator (940306) Taxable or exempt depends on staff and facilities

The industry also decides your cash receipt (hyeongeum yeongsujeung) duties.

Registration Steps

flowchart LR
    A[Decide industry and VAT type] --> B[Prepare business address]
    B --> C[Apply on Hometax]
    C --> D{On-site check needed}
    D -->|No| E[Certificate issued]
    D -->|Yes| F[Tax office check]
    F --> E
    E --> G[Register business account and cards]
    E --> H[Decide on mail-order report]
Channel Use
Hometax / Sontax (mobile) Registration for individuals and corporations, corrections, suspension and closure
Government24 (gov.kr) Registration for individuals, mail-order business report
Internet Registry Office / Online Incorporation System Corporate incorporation registry (corporations register the business after the registry)

Per the NTS guide, processing takes 2 days by default and can take longer if an on-site check is needed.

Business Address

Software businesses often use the home as the place of business.

Type What to check
Home Fairly simple if you own it. If rented, confirm with the landlord that the lease allows business registration
Rented office Submit a copy of the lease. If you rent only part of a building, submit a floor plan of that part
Shared office Check whether the contract with the operator is a sublease and whether it includes an address for business registration
Address-only services Differs from where you actually work, which can cause problems at on-site checks and for relief requirements

Bad example:

To get regional startup tax relief, I registered with a rented address in a region where I do not actually work.

Good example:

I signed with the shared office where I actually work, and confirmed that the contract explicitly allows its address for business registration.

Business Account and Cards

Mail-Order Business Report

Selling goods or services to consumers online can make you a mail-order business operator (tongsin panmae eopja) (E-Commerce Act Article 12).

flowchart TD
    A[Selling to consumers online] --> B{Fewer than 50 mail-order transactions last year}
    B -->|Yes| X[Report exempt]
    B -->|No| C{Simplified taxpayer under the VAT Act}
    C -->|Yes| X
    C -->|No| D[Report via Government24 or the local district office]
    D --> E[Show the report number on the site]

Checklist Right After Registration

Suspending or Closing the Business

Pausing or closing a business also has filings, and the deadlines matter as much as at registration.

Task Deadline and key point Basis
Suspension or closure report File on Hometax or Sontax, or with the tax office (Government24), attaching the registration certificate VAT Act Article 8, Government24 suspension and closure guide
Deemed supply of remaining goods Goods still held at closure (such as equipment whose input VAT was credited) are treated as supplied to yourself and become subject to VAT VAT Act Article 10(6)
Closing VAT final return File and pay for results from the start of the tax period to the closure date, plus remaining goods, by the 25th of the month after the month of closure VAT Act Article 49, Easy Law
Global income tax Income for the year of closure is combined with other income and filed in May of the next year Income Tax Act (NTS global income tax filing guide)
Mail-order business closure report If you filed a mail-order business report, report the suspension or closure to the local government (Government24) E-Commerce Act, Government24
Social insurance workplace withdrawal report If you had staff, file loss-of-coverage reports and a workplace withdrawal report. Health insurance must be notified within 14 days of the event. National Pension workplace withdrawal and loss-of-coverage reports are due by the 15th of the month after the event, and withdrawing the workplace also ends its members' coverage Government24 health insurance workplace withdrawal, National Health Insurance EDI guide, National Pension Service workplace guide
Withholding tax and payment statements Settle withholding tax and payment statements for wages and business income paid up to the closure date Document 07

References