Responding to Tax Investigation Attorney for Tax Appeal, Appealing Unfair Taxation
Responding to Tax Investigation
Attorney
for Tax Appeal, Appealing Unfair Taxation
Tax Investigation Response Team, Tax
Appeal Attorney, Tax Attorney | Dowoo Hwasan Attorneys & Counselors |
Hokeun Yoon, Managing Partner of Dowoo Hwasan
Dowoo Hwasan Attorneys & Counselors is
dedicated to solving a case by specialized lawyers in each field, including international
taxation, tax investigation response, tax advisory, and tax-related
administrative litigation and criminal cases. If you have any questions
about this content or seek detailed legal advice, please contact the Tax/Tax
Investigation Response Team at Seoul Office (02.6207.1114) of Dowoo Hwasan
Attorneys & Counselors. Our dedicated and specialized attorneys will help.
Prohibition of Abuse of Tax Investigation Authority (Article 81-4(1) of
the Framework Act on National Taxes)
Restriction on Extending Scope of Tax Investigation (Article 81-9 of the
Framework Act on National Taxes)
In order to limit abuse of tax
investigation authority and guarantee the predictability of taxpayers, a tax
official shall not extend the scope of a tax investigation during the
investigation period, except in cases prescribed by Presidential Decree, such
as where it is confirmed that specific suspicion of tax evasion exists for
several taxable periods or is related to other items of tax.
Limitation on Exercise of Right to Question and Inspect
Supplementary exercise is allowed only when
the content of the submitted data is admitted to be unjustifiable
(Supplementary)
Comprehensive request for submission of
data is not allowed (Restrictive)
Questioning and inspection rights cannot be
exercised as a means of retaliation or punishment and cannot be exercised in a
way that undermines the credit of the taxpayer in relation to its customers or
financial institutions (Justifiability of methods)
Redetermination to Increase Tax as a Result of Tax Investigation
Penalty taxes are essentially accompanied
· Meaning of Penalty Tax
An amount collected in addition to the
amount of tax calculated in accordance with tax-related Acts to ensure the
faithful fulfillment of duties prescribed in tax laws (Article 2(4) of the
Framework Act on National Taxes)
· Nature of Penalty Tax
Penalty tax mostly presumes principal tax
and has the nature of additional/incidental tax to the principal tax as it is
charged additionally.
- Character as an administrative penalty: Penalty
tax is a type of administrative sanction imposed on a taxpayer who violates the
duty specified in the tax law without justifiable reasons or imposes
liabilities for the violation of the duty to cooperate imposed on the taxpayer,
which is structured as taxation to facilitate the exercise of taxation
authority and realization of tax liabilities (Supreme Court 1995. 11. 7.
Decision 95NU92, Constitutional Court 2003. 9. 25. JA 2003 HUNBA 16).
- However, in the absence of special rules
such as no penalty tax is imposed or collected if there is no calculated tax
amount for the principal tax, penalty tax may be imposed or collected
independently even if there is no calculated tax amount for the principal tax
(Supreme Court 2007. 3. 15. Decision 2005DU12725) à The
nature as independent tax (cannot be deemed as dependent on the principal tax) à When the principal and penalty taxes are levied together, a
separate objection shall be made on the penalty tax, as well as on the
principal tax.
Tax Appeal Attorney, Appeal Procedure
for Tax Investigations
Before the conclusion of a tax investigation
· Tax Officials (National Tax Service’s
Internal Procedures)
- Taxation Standards Advisory System à Consultation before taxation when there is conflict of opinions
(different opinions) between the taxation office and the taxpayer on the tax
law interpretation, which is difficult for the taxation office to determine
independently
- Advisory System for Factual Determination
of Taxation à Consultation before taxation when there is conflict of opinions
(different opinions) between the taxation office and the taxpayer on factual
determinations, which are difficult for the taxation office to determine
independently
- Characteristics: Taxpayers can submit
opinions to each advisory committee and make statements by attending each
committee à Even if there is an on-going taxation standard advisory or factual
determination of taxation advisory procedure, it is necessary to prepare for
follow-up appeal proceedings (request for pre-assessment review, request for
review, trial request).
After the Conclusion of Tax Investigation and Before Taxation
· Taxpayer, pre-assessment review request (Article 81-15 of the
Framework Act on National Taxes)
- Definition: Within 30 days after the
receipt of the notice of scheduled taxation, requesting a review of the
legality of the content of the notice
- Opposite party of the request: Request is
made to the head of tax office or local tax office who made the notice of
scheduled taxation
- Characteristics: After partial closure,
one may pay the tax for the concluded part while disputing the remainder
(possible to respond separately) à After the
tax investigation is concluded (or partial closure), the tax agent’s
cooperation in this stage is as crucial as the procedure before the tax
disposition.
After the Conclusion of Tax Investigation and Taxation
- Appeal (Article 66 of the Framework Act
on National Taxes)
- Request for
examination to the National Tax Service (below Article 61 of the Framework Act
on National Taxes)
-Request for examination to the Board of
Audit and Inspection (see the Board of Audit and Inspection Act)
- Request for tax trial (below Article 67
of the Framework Act on National Taxes)
- Tax litigation: Tax litigation can
proceed when a decision on acceptance could not be obtained after a full-trial
procedure such as a trial request.
Samyoung Building, Suite 701
437 Teheran-ro, Gangnam-gu
Seoul, Republic of Korea 06158
T. +82.2.6207.1114
F. +82.2.6207.1124
E. dowoo@dowoolaw.com
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