Goods or Services Rewarded to Employees

Input tax of dinner party, entertainment expenses, travelling, birthday gift and marriage and death allowance shall not be deducted from output tax by a business entity. If a business entity has declared such input tax for deduction, it can voluntarily file a supplementary tax declaration with the tax collection authority and make supplementary payment covering the tax amount which it has failed to declare, as long as it is neither a case brought about by an informant, nor a case under investigation by an investigator appointed by tax collection authority.

According to Value-Added and Non-Value-Added Business Tax Act, a business entity failed to issue uniform invoices or understated sales amount on uniform invoices, in addition to paying the tax calculated on the basis of the understated or omitted sales amount at the prescribed tax rate, shall be fined 1 to 10 times of the amount of the tax evaded. Business entities committed such violation 3 times within a one-year period shall be suspended from business operation.