Strict Crackdown on 'Tax Evasion' Exploiting National Crisis...Microscopic Investigation of Real Estate Transactions

Significant Reduction in Tax Audits This Year... "Cutting 2,000 Cases Compared to Last Year"
Promoting 'Hometax 2.0' to Enhance Taxpayer Convenience Based on Digital Technology

[Asia Economy Reporter Kwangho Lee] The National Tax Service (NTS) has decided to adopt a zero-tolerance policy against malicious tax evasion and delinquency that exploit the nation's difficulties. In particular, it plans to conduct "microscopic" investigations into irregular tax evasion riding on the overheated real estate market. Considering the difficult economic situation caused by the novel coronavirus disease (COVID-19), the number of tax audits will be significantly reduced this year. The NTS will also prioritize the 'Hometax 2.0' project to promote taxpayers' non-face-to-face filing and payment.

On the 15th, the NTS held its first nationwide tax office chiefs meeting since Commissioner Kim Dae-ji's inauguration at the Government Sejong 2 Complex, where it finalized and announced the second half of the year 'National Tax Administration Operation Plan' with these details.

The meeting was attended by only 42 key personnel, including regional office chiefs, senior officials, and the main department heads conducting the meeting, in consideration of the social distancing level 2 measures due to COVID-19.

Commissioner Kim, who presided over the meeting, stated, "We will strictly punish tax evasion that harms people's livelihoods and goes against national efforts to overcome the crisis, as well as tax evasion in real estate transactions. We will strongly respond to malicious high-value delinquency by strengthening on-site tracking and establishing overseas collection cooperation systems."

The NTS will first thoroughly investigate irregular fund movements related to corporations and private equity funds holding multiple homes, as well as high-priced apartment acquisitions by young people under 30. It will select debts with high evasion potential as a key category and closely monitor whether there is any disguised gifting through debt forgiveness throughout the debt repayment process. It also plans to check for omitted rental income through borrowed-name accounts of high-priced and multiple homeowners, false expense claims by housing rental business operators, and allegations of improper tax reductions.

Additionally, the NTS intends to focus investigative capabilities on illegal corporate fund outflows that undermine fair economic order, management of assets under borrowed names, and unfair transactions abusing dominant positions. It will strengthen tax evasion verification regarding self-dealing such as preferential treatment of related parties and asset transfers through capital transactions for disguised wealth inheritance. The NTS will also actively respond to evasion suspicions while guiding tax obligations so that new industries based on online platforms can settle within the regulatory framework.

Above all, to overcome the economic crisis, the NTS will drastically reduce the total number of audits. To ensure tax audits do not hinder crisis recovery, the total number of audits will be cut from 16,008 cases last year to around 14,000 cases this year. Verification of major tax categories such as income tax will also be limited to about 20% less than the previous year.

Furthermore, the NTS will faithfully implement tax burden reduction and tax administration support measures for self-employed and small business owners extended until the end of this year to support economic revitalization.

Moreover, the NTS will promote Hometax 2.0, which enhances taxpayer convenience based on digital technology. This is a customized platform where taxpayers can check and use everything from notification of filing guidance to filing and payment at a glance. Consultation and civil service will also be improved, including the introduction of social network service (SNS) national tax consultation and support for online submission of national tax certificates.

Commissioner Kim emphasized, "Although the internal and external conditions of national tax administration are challenging due to the COVID-19 crisis, we will overcome these difficulties together with extraordinary determination and confidence that 'we can do it.' Through change and innovation leading the future, we will realize 'a more comfortable and better national tax administration for the people.'"

Meanwhile, the nationwide tax office chiefs meeting is held twice a year by the NTS.

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