Dear Partner,
According to current South Korean VAT regulations, the rebates paid by Tencent Cloud to reseller partners are classified as "Sales Incentives." These payments do not constitute consideration for services rendered, nor do they qualify as sales discounts. Therefore, they should not be subject to South Korean VAT. Please refer to the relevant regulation below for details.
VAT General Rule 10-0…5 [Taxation of Sales Incentives]
Where a business operator pays or supplies incentives or goods at a certain rate based on the sales performance of a transaction counterparty to promote the sales of their own goods: incentives paid in money shall not be deducted from the tax base; those supplied as goods constitute business gifts and are therefore taxable. However, if the goods do not fall under the category of self-produced or acquired goods pursuant to Article 10(1) of the Act, they shall not be taxed. (Revised Dec. 23, 2019)
Please ensure that the rebate invoices issued by your company do not include any VAT amount. Since rebates are not subject to South Korean VAT, your company only needs to issue commercial invoices, and the total amount on the invoice should reflect the original commission amount only.
We kindly ask that you verify this carefully before issuing invoices to avoid any payment delays due to invoice compliance issues.
If you have any questions, please feel free to contact your Tencent Cloud business representative.
Thank you for your ongoing support.
Tencent Cloud
