State, local government, or local-government association (국가·지방자치단체·지방자치단체조합) are public bodies that execute statutory functions rather than ordinary commercial enterprise. When they make payments (salaries, fees for services, or certain procurements), they often act as withholding agents, remitting taxes on behalf of payees according to the income type.
What government entity type can do
They procure goods and services through public procedures, fund projects, and operate public programs. They may manage facilities, sponsor research, and retain vendors for operations.
What to be aware of when contracting
- Expect public-procurement rules, including bidding requirements, documentation, and budget controls.
- Payment processing may involve withholding and unique documentation compared with private contracts.
- Contract terms and dispute processes can differ due to governing statutes and oversight frameworks.
Licenses and permits
As public bodies, they operate under public law; commercial licensing is generally not applicable to the entity itself. If they run activities akin to commercial services, separate statutes or special regimes may apply.
Accounting and income-tax requirements
Government entities follow public-sector accounting. Their principal tax role is administering withholding and remittance. When purchasing from private parties, they must handle the appropriate withholding and provide compliant documentation.