Do I need to pay VAT on sound outsourcing fees from an overseas game company?
If you provide sound services to an overseas game company or studio and receive payment in foreign currency, a zero VAT rate (0%) may apply once it is recognized as a foreign-currency-earning service, but without proper documentation, such as a foreign currency remittance certificate, you may be taxed at the general rate, so prior confirmation is needed. Equipment like audio interfaces over 1 million KRW should be depreciated, and we recommend treating soundproof booth installation costs as either an expense or depreciation depending on the nature of the facility.
Income Structure Features for Sound Designers
Key Necessary Expense Items
Tax Advantages for Sound Designers
Review Zero-Rate VAT for Overseas Game Company Projects
Sound outsourcing contracts with overseas game studios may qualify for zero-rate VAT if recognized as a foreign-currency-earning service.
Spread Tax Burden Through Equipment Depreciation
Audio interfaces and monitor speakers over 1 million KRW should be depreciated over time so you can claim stable expenses every year.
Manage Sound Effect Library Sales as Separate Income
If you sell sound effect and sample libraries you created yourself, managing them separately from outsourcing income clarifies your VAT and income classification.
The Most Common Mistake in the Field
The most common mistakes are receiving overseas game company project payments without gathering zero-rate documentation, such as a foreign currency remittance certificate, resulting in taxation at the general rate, or confusing the timing of equipment purchase and depreciation treatment.