National Tax Service Establishes Dedicated Unit for 'Irregular Real Estate Transaction Tax Evasion'... Focused Investigation on High-Income Professionals

Targeting former officials such as lawyers, tax accountants, customs brokers, and patent attorneys
'Investigation performance criteria' fully abolished... Introduction of qualitative evaluation method

[Asia Economy Reporter Kwangho Lee] The National Tax Service (NTS) will establish a 'Dedicated Task Force for Countering Evasive Real Estate Transactions' in all regional offices. In particular, it will conduct tax investigations targeting professionals such as lawyers, tax accountants, and customs brokers who receive preferential treatment as former officials, earn substantial income, and fail to pay proper taxes.

According to the NTS on the 6th, regional offices including the Seoul Regional Tax Office will implement this plan as part of their national tax administration agenda this year.

First, the headquarters and regional offices plan to strictly respond to sophisticated tax evasion that causes taxpayers to feel a sense of loss, as part of establishing the foundation of a 'fair society.'

To this end, dedicated teams will be set up within the investigation departments of seven regional offices to block evasive real estate transactions through irregular gifts and other means. They will focus on investigating suspicious cases filtered through the government's joint real estate speculation investigation as well as real estate-related tax evasion cases independently uncovered by the regional offices.

Professionals such as lawyers, tax accountants, customs brokers, and patent attorneys who accumulate wealth by exploiting preferential treatment as former officials and evade taxes will also be the focus of intensive tax investigations. The main targets are those suspected of evading taxes through irregular methods such as failing to report income or inflating expenses, despite earning substantial income by abusing private relationships or superior positions as retired senior public officials.

An NTS official said, "Among professionals, we will intensively investigate cases where income has significantly increased within a few years after retirement and where there is strong suspicion of evasion based on preliminary investigations."

The NTS will strictly respond to serious tax evasion while also establishing measures to prevent excessive and arbitrary tax investigations.

Regional offices will completely abolish the investigation performance (amount of additional tax collected) criterion, which was the most important indicator for evaluating employees and teams responsible for tax investigations. Instead, a qualitative evaluation method reflecting excellent investigation cases and compliance with legal procedures will be introduced.

Furthermore, internal regulations will be revised so that high-value tax issues handled by regional offices and tax offices must undergo prior verification by the investigation review team within the regional office. This aims to reduce arbitrary judgments by investigation staff and carefully examine the legitimacy of tax investigations and taxation from an objective perspective.

The criteria for mandatory review of high-value taxation are known to be 1 billion KRW or more for individuals and 3 billion KRW or more for corporations. For the first time, a system will be introduced that officially differentiates the intensity of investigations based on the level of cooperation, such as timely submission of necessary documents during the tax investigation process.

This content was produced with the assistance of AI translation services.