Is card processing fee also recognized as an expense?
Yes, card processing fees are business-related expenses, fully deductible at the time they're incurred. Refrigeration/freezer display cases, checkout counters, and POS systems are classified as a depreciable asset once the per-unit purchase exceeds KRW 1 million and must be expensed over their useful life, and cashiers and store-management part-timers require withholding-tax filing and submission of a payment statement regardless of hours worked. Given how many small-ticket, multi-item transactions this business has, it's important to keep every related receipt.
The Trickiest Part — Inventory Valuation and Fresh-Food Losses
Carrying many product lines means your inventory management approach has a direct impact on taxes
Keep Your Inventory Valuation Method Consistent
How you value ending inventory (FIFO, weighted-average, etc.) changes your cost of goods sold and taxable income. Once you choose a valuation method, apply it consistently every year — changing it arbitrarily can draw scrutiny in a tax audit.
Document Fresh-Food Disposal Losses
When you dispose of expired or damaged fresh food, keeping documentation such as a confirmation or photos lets you record it as an inventory loss. Removing inventory from the books arbitrarily without documentation may be mistaken for unreported revenue.
Income Structure Features of Marts & Supermarkets
Key Expense Items
Must-Know for Marts & Supermarkets
Split Store Fixtures & Inventory Management by Category to Save on Taxes
From refrigerated display cases to card processing fees, categorizing each item correctly is what cuts unnecessary tax
Long-Term Fixed Assets — Equipment Subject to Depreciation
Store fixtures: refrigeration/freezer display cases, checkout counters
Store equipment: shopping carts/baskets, 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.
Cost of Goods Purchased — Inventory Asset Management
The cost of fresh food and packaged goods is tracked as inventory at purchase and recorded as cost of goods sold when sold. Keep your valuation method consistent and conduct regular physical inventory counts.
Personal-Service Costs — Cashier & Store-Management Labor Costs
Cashiers and store-management part-timers require withholding-tax filing and submission of a payment statement regardless of hours worked.
Card Processing Fees
Card processing fees are a recurring monthly cost, expensed in full at the time they're incurred.
| Category | Typical Examples | Tax Treatment |
|---|---|---|
| Long-term fixed assets | Refrigeration/freezer cases, checkout counter, POS | Depreciated once over KRW 1M |
| Cost of goods purchased | Fresh food, packaged goods | Tracked as inventory, valuation method kept consistent |
| Personal service | Cashier/store-management labor costs | Withholding filed, payment statement submitted |
| Card processing fees | Card-company processing fees | Expensed immediately |