Academies and study rooms have different registration procedures — does that mean their tax filing methods are completely different too?
If you formally register as an academy, the educational service becomes VAT-exempt, so you have no VAT filing/payment obligation — but by the same token, you cannot claim a refund on the VAT you paid on rent, fixtures, and other purchases. A small study room operated without hiring instructors, on the other hand, is often registered with the local education office as a private tutor, which means an entirely different filing system. It is important to first decide your operating scale and whether you will hire instructors, then choose the form that matches.
Academies operate under a completely different tax structure from other self-employed businesses
The biggest difference is that registered educational services are VAT-exempt
VAT exemption — no filing/payment obligation
Educational services provided by an academy or tutoring center registered with the competent authority are VAT-exempt. Unlike restaurants or retail, you do not need to file VAT at all. Dance academies and driving schools are an exception and remain taxable.
But you also cannot claim the input VAT credit
Because you are a VAT-exempt business, you cannot get a refund on the VAT you paid on rent or fixture purchases. If you have expenditures with a large VAT component, such as interior work or equipment, factor this in when planning your finances.
Income structure characteristics of academies & study rooms
Key expense categories
Frequently Asked Questions
Tax priorities differ by type of academy
Select the type of academy you run to see content tailored to your specific business
Exam Prep & Tutoring Academy
Korean/English/math school & CSAT prep, instructor fee/prepayment management
Grades go up and down, but your tax filing needs to be accurate every time
Foreign Language Academy
Tax treaty exemption for native-speaker instructors, certified test-prep classes
Leave pronunciation correction to the native speaker, and your tax filing to us
Arts & Sports Academy
Art/music/dance/PE, individual lesson instructor contracts
Lessons are tailored one-on-one; so is our tax advice for you
Computer & IT Academy
Coding/certification/video editing, government-funded course settlement
Just as you teach students to code, we teach you how to save on taxes
Vocational & Certification Academy
Cooking/baking/beauty/real estate broker, practical materials expense treatment
Practice materials are handled carefully, but expense treatment rarely is
Essay/Transfer/Civil Service/Driving School
Driving schools are an exception subject to VAT
Passing is the student's effort; tax savings are our know-how