Korea Computerized Tax Accounting Level 2 (전산세무 2급) key terms

A VAT invoice issued and transmitted electronically through the National Tax Service system or an approved ASP, replacing paper for corporate and certain individual business operators. It must be issued within the statutory deadline and reported to the tax office.

The point at which a VAT invoice must be issued, generally when goods or services are supplied. For most transactions this is the date of supply, but special rules apply to prepayments, continuous supply, and consignment sales.

The moment a taxable transaction is deemed to occur for VAT purposes, triggering the obligation to issue an invoice and report tax. It generally coincides with delivery of goods, completion of services, or receipt of payment.

The mechanism allowing a business to deduct VAT paid on purchases and expenses from the VAT collected on sales. Only invoices and receipts meeting legal requirements qualify; non-business or unsubstantiated purchases are excluded.

Input VAT that cannot be deducted from output tax, such as tax on non-business expenditures, passenger cars for non-business use, entertainment expenses, and purchases without valid invoices. These amounts are treated as cost or expense.

A VAT rate of zero applied to exports and certain foreign-currency transactions, allowing the seller to claim a refund of related input tax. Unlike exempt transactions, zero-rated sales permit full input tax deduction.

A VAT exemption for specified goods and services such as unprocessed agricultural products, medical services, and education. No output tax is charged, but related input tax generally cannot be deducted.

The periodic filing in which a taxpayer reports output tax, input tax, and payable or refundable VAT. General taxpayers file semi-annually with preliminary returns, while simplified and exempt taxpayers follow different schedules.

An interim VAT return filed during the first or third quarter by general taxpayers, reporting transactions for that period. It is later reconciled against the final return for the full six-month period.

The final VAT return covering the full six-month taxable period, filed after the period ends. Preliminary returns already filed for the period are credited, and any difference becomes payable or refundable.

A small business operator whose annual sales fall below the statutory threshold and who pays VAT on a simplified basis using an industry-specific value-added rate. Input tax deduction is limited compared with general taxpayers.

A VAT taxpayer subject to the standard regime, charging 10% output tax and deducting eligible input tax based on invoices. Most corporations and businesses above the simplified threshold fall in this category.

The monetary amount on which tax is calculated. For VAT it is generally the supply price excluding VAT; for income and corporate tax it is taxable income after deductions.

Tax levied on the taxable income of a corporation for each business year. It is computed by deducting expenses and loss carryforwards from revenue, applying the corporate tax rates, then subtracting tax credits.

The taxable profit of a corporation for a given fiscal year, calculated as revenue minus deductible expenses, with adjustments for non-taxable income and non-deductible expenses. It forms the base for corporate income tax.

An expense recognized in accounting that tax law disallows as a deduction, such as fines, excess entertainment expenses, and certain provisions. It increases taxable income through a tax adjustment.

An item that tax law permits as a deduction even though it was not recorded as an expense in the books, such as certain reserves or special depreciation. It reduces taxable income through a tax adjustment.

Income recorded in the financial statements that is excluded from taxable income by law, such as certain capital contributions or insurance proceeds. It decreases taxable income in the tax adjustment process.

An amount that must be included in taxable income although it was not recorded as revenue in the books, such as understated sales or certain deemed income. It increases taxable income during tax adjustment.

A direct reduction of the computed tax amount, applied after the tax rate is multiplied by the tax base. Common examples include credits for foreign tax paid, research and development, and employment growth.

Tax imposed on individuals' income, classified into global, retirement, and capital gains income, each with separate computation rules. Global income is taxed progressively after deductions and credits.

Aggregated individual income from business, employment, interest, dividends, pensions, and other sources, taxed together on a progressive scale. It is reported annually by May 31 of the following year.

A deduction subtracted from gross income before applying tax rates, covering items such as basic living costs, dependents, and pension contributions. It reduces the tax base rather than the tax itself.

The payer's obligation to deduct tax at source when paying certain income, such as wages, interest, or service fees, and remit it to the government. The withheld amount is credited against the recipient's final tax.

Income earned by an employee from an employer in return for labor, including wages, bonuses, and allowances. It is subject to withholding and later settled through the year-end tax adjustment.

The annual process in which employment income tax withheld during the year is reconciled against the employee's actual deductions and credits. Any overpayment is refunded and any shortfall is collected.

An indirect tax levied on the value added at each stage of production and distribution, collected from the final consumer. Businesses charge output tax and offset eligible input tax, remitting the difference.

The VAT a business charges on its taxable sales, calculated by applying the tax rate to the supply price. It is the starting point for computing VAT payable after deducting input tax.

The basic statute governing national tax administration, covering tax liability, assessment, payment, refunds, and taxpayer rights. It applies across individual tax laws unless they provide otherwise.

The period for which tax liability is calculated and reported, such as a calendar year for income tax or six months for VAT. It determines which transactions belong to a given return.

An additional charge imposed for failing to file, underreporting, or paying tax late, calculated as a percentage of the unpaid or understated tax. It is distinct from interest for late payment.

A penalty added when tax is paid after the due date, calculated by applying a daily rate to the unpaid amount for the number of overdue days. It compensates for the delay in payment.

A bookkeeping method recording every transaction as equal debits and credits, keeping the accounting equation in balance. It supports preparation of financial statements and is required for certain taxpayers.

The initial recording of a transaction in the journal, identifying the accounts, amounts, and whether each is debited or credited. Entries are later posted to the general ledger.

The process of transferring journal entries to the general ledger accounts. It updates account balances so that a trial balance and financial statements can be prepared.

A financial statement showing assets, liabilities, and equity at a specific date, based on the accounting equation. It reports what the entity owns and owes at that point in time.

A financial statement reporting revenues and expenses for a period and the resulting profit or loss. It explains the change in retained earnings from operating activities.

An accounting basis recognizing revenue when earned and expenses when incurred, regardless of cash receipt or payment. It requires adjusting entries for accruals, prepayments, and depreciation.

Adjusting and closing journal entries made at period end to record accruals, depreciation, and inventory, and to transfer temporary accounts to retained earnings. They ensure statements reflect the period's results.

The ongoing recording of business transactions in books according to tax and accounting rules. Proper bookkeeping supports tax reporting and can qualify taxpayers for deductions and credits.

The records in which transactions are entered, including journals, ledgers, and supporting documents. Tax law prescribes which books must be kept and how long they must be retained.

Documents evidencing a transaction, such as tax invoices, receipts, and contracts, required to substantiate expenses and input tax. Missing documentation can lead to disallowance or penalties.

Software used to record transactions, generate financial statements, and produce tax returns and electronic invoices. The exam tests operating this software, including voucher entry, closing, and report generation.