Before paying for a credit rating report, offer public tax certificates

Companies in Korea, including foreign-owned ones, often get a request to send a corporate credit rating report (기업신용평가서), for example when registering as a supplier or during a customer's annual credit check. A report costs money and takes several days. The requester usually wants to know only three things: whether you are still in business, whether you are behind on taxes, and roughly how strong your finances are. Public certificates issued by the National Tax Service (국세청) and local governments can show all three, so try them before ordering a report.

Ask what the report is for

When the request letter or email arrives, first ask in writing what the report will be used for. The purpose decides whether you can offer alternative certificates.

• New supplier registration: check whether the registration rules make the report a mandatory document.
• Annual routine credit check: this is where you have the most room to propose alternatives.
• Checking a specific issue: if the requester suspects falling sales or rising debt, a certificate that shows that item directly is more convincing.
• Eligibility review for a public tender: you must submit the documents set in the tender notice, so substitution is difficult.
• Loan review by a financial institution: follow the bank's own forms.

Public tenders and bank reviews require set documents. The room to negotiate lies with private customers. Also point out that, in principle, the party that wants the check should commission the rating; if the rated company orders it itself, all the cost and preparation fall on that company.

What a credit rating report costs

Fees differ by rating agency, and within one agency they depend on asset size and processing speed. The table shows the fees published by BizRating (비즈레이팅), a service run by the credit information company 서울평가정보 (Seoul Pyeongga Jeongbo), for reports submitted to public bodies or private companies. VAT is included.

Faster processing costs extra on top of the base fee: ₩165,000 for express (3 business days), ₩275,000 for express plus (2 business days) and ₩440,000 for same-day or next-morning express. For a sole proprietor (개인사업자), the fee is ₩242,000. If one company sends reports to two or three customers every year, these amounts repeat every year.

Public certificates that can replace the report

The National Tax Service lists 14 certificates that tax offices issue on the spot, and 13 of them can also be printed at unmanned civil-service kiosks (무인민원발급기). Pick the ones that answer the requester's three questions and send them as a set. The table also shows which can be issued on Hometax (홈택스), the National Tax Service website. Local tax certificates come separately from Wetax (위택스), the local tax website, or Government24 (정부24), the government services portal.

The National Tax Service guide also leaves the standard financial statement certificate off the kiosk list. If you need it in a hurry outside office hours, Hometax is the safe route.

Tax payment certificates are valid for 30 days

A national tax payment certificate is valid for 30 days from the date of issue under Article 96(1) of the Enforcement Decree of the National Tax Collection Act (국세징수법 시행령). If a national tax with a payment notice is outstanding on the issue date, however, the head of the tax office can set the validity to end on that tax's designated payment deadline. The reason and the validity period are then written on the certificate (Article 96(2)).

Local taxes follow the same structure. Article 7(1) of the Enforcement Decree of the Local Tax Collection Act (지방세징수법 시행령) sets the validity at 30 days from issue. It can be shortened to the payment deadline if a local tax has been billed, or if the last day of a local tax's statutory payment deadline falls within the 30 days. Local taxes paid by self-assessment or collected through special collection (특별징수) are left out of this shortening.

So match the issue date to the submission date:

• Check the customer's submission deadline first.
• Issue the tax payment certificate just before that deadline.
• Check whether a separate validity period is written on the certificate.
• If you have an unpaid tax bill, pay it before you request the certificate.
• When you send several documents together, count validity from the earliest issue date.

When the customer accepts, or still wants the report

If the customer accepts the alternatives, you are done. For a company without bank loans, bank documents and tax payment certificates alone often settle the requester's concerns. If you already use bank loans or guarantees from a guarantee institution, you can also offer to share the materials you submitted for those reviews.

A rating, once issued, stays in the customer's internal records. If your financial figures are at an awkward stage, negotiate with alternative certificates first.

Related guides: the SME confirmation certificate's validity period and, if you are the one collecting money, payment orders and the stamp duty correction.

Checklist

Proposing alternative certificates

1. Get the purpose of the request and the submission deadline in writing.
2. Check whether the registration rules make the report mandatory.
3. Propose a set of alternative certificates and get an answer on whether it is accepted.
4. Issue the certificate of business registration and the VAT tax base certificate first.
5. Get the standard financial statement certificate on Hometax.
6. Issue the national and local tax payment certificates just before submission.
7. If bank documents are needed, ask your main bank for the document name and how to get it.
8. Send a one-page list of the documents and each issue date with the set.

If you must submit a credit rating report

• Agree first on who pays for it.
• Apply for the submission purpose (public body, private company or financial institution) that matches the customer's request.
• Skip express processing if the deadline allows.
• Check your latest financial statement figures yourself before applying.
• Have one person manage the rating agency account and set the authentication method.
• Check the validity period of the report you receive, to see whether you can reuse it for the next request.