Starting in July 1, 2012, when an amended tax invoice is being issued upon termination of a contract, the contract termination date must be indicated on the amended tax invoice as the issuance date for the amended tax invoice. According to the Enforcement Decree of the Value-added Tax Act revised as of February 22, 2012, the method of issuing the amended tax invoice due to termination of a contract has changed from writing the original date of issuance for the tax invoice as the issuance date and writing the date of contract termination in the remarks section to, instead, writing the contract termination date as the issuance date and indicating the original issuance date in the remarks section. The applicable date for this change to go into effect is the first day (after July 1, 2012) on which a reason for issuance of an amended tax invoice occurs.

One of the main reasons for the Korean government to revise the Enforcement Decree of the Value-added Tax Act is due to the fact that if the date of issuance on the amended tax invoice showed the original date of issuance, then a taxpayer who submits a claim for reassessment of the original tax base or who files an amended tax return had to separately report such change, which was onerous for taxpayers.

Accordingly, moving forward, in case of termination of a contract, the termination date must be dated on the amended tax invoice as the issuance date, and such date must be reflected in the tax base during the appropriate tax period for the value-added tax. This revision eliminates the burden of having to file an amended tax return or claim for reassessment of the tax base.