We bought non-genuine parts overseas and there's no tax invoice — can we still expense them?
A tax invoice can be hard to obtain, but keeping an import declaration, customs record, or purchase receipt lets you still recognize the expense, and increasing your purchase share from a proper domestic importer is favorable when it comes to the input VAT credit. Manufacturer-authorized repair fees and independent-repair revenue billed directly to customers are different in nature and should be managed separately, and damage compensation paid during a repair is deductible as a loss.
The Trickiest Part — Non-Genuine Parts Documentation and Separating Authorized Repairs
Managing documentation for overseas parts purchases and correctly separating manufacturer-authorized repair revenue are the key issues
Tax Invoices Are Hard to Get for Overseas Direct-Import Parts
Non-genuine parts such as screens and batteries are often bought directly from overseas, making domestic tax invoices hard to obtain. Keep an import declaration, customs record, or purchase receipt as documentation, and increasing your share of purchases from a proper domestic importer is favorable.
Manage Authorized-Repair and Independent-Repair Revenue Separately
The fee you receive from a manufacturer for authorized repair work is different in nature from repair fees billed directly to customers for independent repairs. The invoicing method for authorized repairs is often set by contract with the manufacturer, so check the contract terms in advance.
Income Structure Features of Phone & Electronics Repair Shops
Key Expense Items
Must-Know for Phone & Electronics Repair Shops
Split Repair Equipment & Parts by Category to Save on Taxes
From diagnostic equipment to parts-inventory management, categorizing each item correctly is what cuts unnecessary tax
Long-Term Fixed Assets — Equipment Subject to Depreciation
Repair equipment: precision soldering iron, reballing station
Diagnostic equipment: dedicated phone/electronics diagnostic tool
Store fixtures: parts storage cabinet, POS system
Once a per-unit purchase exceeds KRW 1 million, it's classified as a depreciable asset and must be expensed over its useful life.
Parts & Consumables — Immediate Expense
Consumable parts such as screens, batteries, and connectors are expensed in full at the time of purchase as cost of goods sold or a supplies expense. Whether parts are genuine or non-genuine makes no difference for expense recognition as long as documentation is solid.
Personal-Service Costs — Subcontracted Technician Withholding
Payments to an outside technician hired per job for a repair must be withheld at 3.3% as business income and filed by the 10th of the following month.
Liability & Warranty Management Costs
Liability insurance premiums for damage or loss during a repair, and reserve-parts inventory costs for repair warranties (after-sales service), are recognized as expenses necessary for the operation of the business.
| Category | Typical Examples | Tax Treatment |
|---|---|---|
| Long-term fixed assets | Soldering iron, reballing station, diagnostic tool | Depreciated once over KRW 1M |
| Parts & consumables | Screens, batteries, connectors | Fully expensed immediately at cost |
| Personal service | Outside repair technicians | 3.3% withholding, filed by the 10th of next month |
| Liability & warranty management | Liability insurance premiums, A/S reserve parts | Expensed immediately |