If a client prepays for a one-year membership, when do I issue the tax invoice?
In principle, a tax invoice or cash receipt itself is issued at the time payment is received. However, the timing for recognizing actual revenue (income) is treated differently. For profit-and-loss purposes, the accounting principle is to allocate revenue across the period when the treatment service is actually provided, so instead of recording the full amount as revenue the moment it's received, it's safer to manage it as a deferred revenue account and convert it to revenue as each service is delivered.
The Most Confusing Part — Membership Deposits and Distinguishing Beauty Equipment
You should sort out timing for recognizing prepaid membership revenue and medical-device misclassification risk in advance
A deposit isn't revenue the moment you receive it
Even if you receive membership or package payments in advance, the accounting principle is to recognize actual revenue only as the treatment service is provided. Recording the full amount as revenue when received can be an accounting error, so manage it as a deferred revenue account and convert it to revenue as service is delivered.
Keep beauty equipment clearly distinct from medical devices
Advertising or using treatment devices like radio-frequency and ultrasound equipment as if they were medical procedures can raise Medical Act violation concerns. Confirm that any device you purchase is usable within the scope of beauty business registration and manage your advertising language carefully.
Income Structure of Skincare Clinics & Estheticians
Key Expense Items
Must-Read for Skincare Clinic & Esthetician Owners
Split Your Equipment & Materials Costs by Type to Save on Taxes
From beauty equipment to esthetician incentives, categorizing each item correctly cuts unnecessary tax
Long-Term Fixed Assets — Depreciable Equipment
Treatment equipment: radio-frequency, ultrasound, and other beauty devices
Treatment fixtures: treatment bed, steamer
Store equipment: interior, POS system
If a single transaction exceeds 1 million KRW, it's classified as a depreciable asset and must be expensed over its useful life.
Supplies — Immediately Deductible
Treatment cosmetics, packs, masks, and disposable sheets are fully expensed at the time of purchase. Keep these separate from your retail cosmetics inventory.
Personnel Service Costs — Esthetician Incentives
If an esthetician is settled as a business-income earner (3.3%), withhold 3.3% of the incentive payment and file and pay it by the 10th of the following month.
Franchise Fees & Headquarters Management Costs
At franchise locations, royalty, training fees, and headquarters group-purchase cosmetics costs are recurring monthly expenses fully deducted at the time incurred, and you must be sure to obtain headquarters tax invoices/bills.
| Category | Examples | Tax Treatment |
|---|---|---|
| Long-term fixed assets | Beauty devices, treatment bed, interior | Depreciate if over 1 million KRW |
| Supplies | Cosmetics, packs, masks, disposable sheets | Fully deductible at purchase |
| Personnel services | Esthetician incentives | 3.3% withholding or employment income |
| Franchise fees & headquarters management | Royalty, training fees, group-purchase costs | Immediately deductible |