Businesses Must Issue Invoices When Using Inventory to Repay Debts After Closure
When a business shuts down and uses its remaining inventory to repay debts, the transaction is considered a sale. The company must issue a uniform invoice based on the fair market value and report the corresponding business tax.
After a business is dissolved or terminated, any leftover goods for which input tax has already been deducted are also treated as sales if transferred to creditors. In such cases, invoices should be issued at fair market value — meaning the going rate for similar goods or services at that time and place.
Businesses that fail to declare or pay the required tax due to oversight or unfamiliarity with regulations can still correct the mistake. By voluntarily reporting and paying the omitted tax, along with interest, before an investigation begins, they may be exempt from penalties under Article 48-1 of the Tax Collection Act.
