Can a cafe claim the deemed input tax credit on coffee beans the same way a restaurant does?
What matters isn't the beans themselves, but whether you purchase tax-exempt raw materials like milk, fruit, or syrup. If you do, you may qualify for the deemed input tax credit just like a restaurant. Coffee beans, however, may or may not qualify depending on the purchase form (whether tax-exempt), so you need to check item by item based on your actual purchase tax invoices and bills. It's also worth remembering that fixtures over 1 million KRW, such as interior work, are subject to depreciation.
Cost Structure of Running a Cafe
Key Expense Items
Tax Advantages Unique to Cafes
Reviewing the Deemed Input Tax Credit on Tax-Exempt Raw Materials
If you purchase tax-exempt raw materials like milk or fruit, you may qualify for the deemed input tax credit. Organizing tax invoices and bills by supplier prevents you from missing this credit.
Optimal Depreciation Design for Interior Costs
If your initial interior investment is large, how you set the depreciation method and useful life changes your tax burden in the early years. Allocating depreciation to the low-revenue early period after opening helps manage your taxes.
Reducing Income Tax with the Nolan Umbrella Fund
Individual business owners with business income can use their Nolan Umbrella Fund contributions as an income deduction to reduce their comprehensive income tax burden.
The Most Common Mistake We See
The most common mistake is buying raw materials with a personal card and not keeping the receipt, which means missing out on the expense deduction. Setting up a dedicated business card and using it exclusively lets expenses accumulate automatically, which is far more accurate and convenient.
Frequently Asked Questions
Tax Points Differ by Cafe Type
Select the type of cafe you run to see guidance tailored to your business
Independent Cafes & Roasteries
Deemed input tax credit on green coffee beans, roasting equipment depreciation
You roast the beans yourself — let us roast your tax filing for you
Franchise Cafe Locations
Managing headquarters royalty and logistics fee settlement
Headquarters builds the brand — we build your tax filing right alongside you
Dessert & Bakery Cafes
Recognizing spoilage losses, revenue recognition for cake deposits
Bake your desserts fresh every day — we'll keep your books just as fresh
Unmanned Cafes
Managing unmanned sales, recognizing theft and equipment-failure losses
No staff on site, but your revenue tracking is more meticulous than any staff member
Takeout-Only Shops
Depreciating small-store interiors, managing settlement alongside delivery apps
Take your coffee to go — leave your tax filing with us