Restaurant & Eatery Owner Tax Guide

Q: Are delivery app fees fully deductible?

Yes, brokerage fees and payment processing fees from delivery apps like Baemin, Coupang Eats, and Yogiyo are fully deductible as business-related expenses. Just keep each platform's monthly settlement statement and tax invoice on file.

Q: Do I have to issue a cash receipt to customers who pay in cash?

Yes. The restaurant business is designated as an industry subject to mandatory cash receipt issuance. For any cash transaction of 100,000 KRW or more, you must issue a receipt even without a customer request, or face a penalty of 20% of the unissued amount.

If a customer paying cash doesn't ask for a cash receipt, can I skip issuing one?

No, you can't. The restaurant business is designated as an industry subject to mandatory cash receipt issuance, so for any cash transaction of 100,000 KRW or more, the business owner must issue a receipt even without a customer request. Skipping it just because the customer didn't ask can result in a penalty of 20% of the unissued amount. This applies equally to cash payments made through delivery and takeout, not just dine-in sales, so it's important to track every payment method without exception.

Revenue Structure of Restaurants & Eateries

Dine-in sales plus takeout and delivery sales are spread across channels, making totals complex to track

Delivery app settlements show the amount actually deposited after fees and promotions are deducted, which can be mistaken for missing revenue

Cash sales are cross-checked by the National Tax Service alongside card and delivery app sales

Eligible for the Credit Card Sales Tax Credit (1.3% of issued amount, 2.6% for simplified taxpayers, capped at 10 million KRW/year); subject to diligent filing confirmation if prior-year revenue exceeds 750 million KRW

Daily wages for part-time and kitchen assistant staff are tax-free up to 150,000 KRW/day, with only the excess withheld (effective rate about 2.7%)

Key Expense Items

Food ingredient costs (meat, seafood, vegetables, etc.)

Delivery app brokerage and payment processing fees

Packaging containers and disposables

Depreciation of kitchen equipment, refrigerators, etc.

Wages for dine-in and kitchen part-time staff

A Tax-Saving Point Unique to Restaurants — the Deemed Input Tax Credit

A VAT refund system available only to restaurants, unlike other industries

Even VAT-free agricultural and fishery purchases can earn you a credit

If you buy VAT-exempt raw materials like vegetables, seafood, or livestock products to cook and sell, you can claim a portion of the purchase price as a deemed input VAT credit — even without a tax invoice. Individual restaurant operators get a preferential 9/109 credit rate for the portion of their taxable base up to 200 million KRW.

No documentation, no credit

It's common to buy ingredients with cash at traditional markets or fish markets without keeping a receipt, but you must obtain a bill, card receipt, or cash receipt to qualify for the credit. There are also caps based on your revenue, so a large purchase volume alone doesn't guarantee a full credit.

Frequently Asked Questions

What is the deemed input tax credit? Can my restaurant get it too?

If your restaurant purchases VAT-exempt agricultural or fishery ingredients — like vegetables, seafood, or livestock products — as raw materials for cooking and selling, you can claim a deemed input tax credit on a portion of that tax-exempt purchase, even without a tax invoice. Individual restaurant operators get a preferential 9/109 credit rate for the portion of their taxable base up to 200 million KRW, but you must have documentation such as a bill, card receipt, or cash receipt.

Are delivery app fees fully deductible?

Do I have to issue a cash receipt to customers who pay in cash?

Tax Points Differ by Restaurant Type

Select the type of restaurant you run to see guidance tailored to your business

Korean Home-Style Restaurants

Maximizing the deemed input tax credit, managing high-turnover sales

You serve a meal that feels like home — we keep your books just as tidy

BBQ & Grill Restaurants

Managing high meat cost ratios, depreciation of ventilation and duct systems

Char the meat to perfection — we make sure your taxes never get burned

Snack Bars & Gimbap Shops

Distinguishing VAT taxability of cooked food, managing delivery share

Roll every gimbap with care — we make sure nothing leaks out of your tax filing

Delivery-Only (Shared Kitchen)

Shared kitchen rent, business registration without a storefront

Share the kitchen all you like — we handle your tax filing entirely on our own

Bars & Pubs

Alcohol input tax credit, distinguishing entertainment-tavern special consumption tax

Pour every glass with ease — we fill in your tax filing without a single gap

Related Industries Worth a Look

Cafes & Beverage Shops

Cafe tax matters that optimize expensing of rent, labor, and materials

Lodging

Managing mandatory cash receipt obligations for pensions and guesthouses

Retail & Convenience Stores

Inventory management, card sales tax calculation on your behalf

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