National Tax Service Tax Law Interpretation Requests 'Processing Delays'... "20% of Written Inquiries Pending Over One Year"

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[Asia Economy Reporter Jang Sehee] It has been confirmed that about 20% of cases where taxpayers requested written inquiries to clarify ambiguous parts of the tax law have remained unresolved for over a year.

According to the '2019 Fiscal Year Settlement Review Report' by the National Assembly's Planning and Finance Committee on the 17th, as of the end of April this year, the National Tax Service (NTS) was handling 2,920 written inquiries from taxpayers regarding tax law interpretation, of which 557 cases (19%) had been pending for more than one year since receipt.

Looking at the elapsed time since receipt, 1,056 cases (36%) were within three months, 663 cases (23%) were between three to six months, and 644 cases (22%) were between six months to one year.

With several changes in real estate taxation such as comprehensive real estate tax and capital gains tax over the past few years, the number of written inquiries submitted by taxpayers to the NTS has been increasing annually. Accordingly, the time taken by the NTS to process tax law interpretation tasks appears to be lengthening.

According to the NTS, the number of written inquiry applications recorded was 2,933 in 2015, 3,558 in 2016, 3,368 in 2017, 3,989 in 2018, 4,473 in 2019, and 2,103 from January to April this year.

Under NTS regulations, individuals and corporations can submit written inquiries to the Commissioner of the NTS regarding general matters related to tax law interpretation. In such cases, the relevant tax department initially receives and processes the inquiry. If there is no existing interpretation and a new one is needed, or if the existing interpretation is significantly unreasonable and requires revision, the case is forwarded to the Tax Collection Legal Affairs Bureau for processing.

If the Tax Collection Legal Affairs Bureau receives a written inquiry that requires interpretation according to legislative intent, necessitates changing existing interpretations or practices, or significantly affects the rights and obligations of taxpayers, it requests tax law interpretation from the Ministry of Strategy and Finance.

Although the NTS is required to notify taxpayers if their written inquiry responses take a long time, it was found that only 33 such written notifications were sent to taxpayers by the NTS over the past five years.

In the review report, the Planning and Finance Committee pointed out, "The NTS needs to ensure that taxpayers do not suffer disadvantages such as additional taxes and enhance taxpayers' predictability," and added, "The NTS should strive to shorten the processing period for written inquiries and improve related matters such as notification obligations so that taxpayers can easily understand the progress of their cases."

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