Strict Crackdown on Malicious Tax Evasion and Delinquency... About 2,000 Tax Audits Reduced This Year

[Asia Economy Reporter Kwangho Lee] The 'National Tax Administration Operation Plan' announced by the National Tax Service (NTS) at the nationwide tax office chiefs meeting on the 15th contains detailed implementation measures for the tax administration innovation direction revealed by Commissioner Kim Daeji in his inaugural speech. At the inauguration ceremony on the 21st of last month, Commissioner Kim stated, "We must establish a fair national tax administration that upholds tax justice," and added, "We will apply a zero-tolerance principle to real estate tax evasion."

◆Strict Punishment for Malicious Tax Evasion... 'Microscopic' Investigation of Real Estate Transactions= First, the NTS will thoroughly investigate irregular fund movements related to multi-home ownership by corporations and private equity funds, as well as high-priced apartment acquisitions by young people under 30. In particular, debts with a high possibility of concealment will be selected as key types, and the entire process of debt repayment, including debt forgiveness, will be closely monitored for signs of disguised gifting.

They also plan to check for omitted rental income through borrowed-name accounts of high-priced and multi-home owners, false expense claims by housing rental business operators, and allegations of improper tax reductions.

Additionally, the plan is to focus investigative capabilities on illegal outflows of corporate funds, operation of borrowed-name assets, and unfair transactions abusing superior positions. Tax evasion verification will be strengthened for self-dealing such as preferential treatment in work allocation and splitting, as well as disguised wealth inheritance through capital transactions.

Furthermore, the NTS will actively respond to evasion suspicions while guiding tax obligations so that new industries based on online platforms can settle within the regulatory framework.

At the meeting, Commissioner Kim emphasized, "We will respond strictly with firm determination to malicious tax evasion and arrears that exploit national difficulties," and added, "We will concentrate investigative capabilities on eradicating serious evasion acts that harm people's livelihoods, such as tax evasion infringing on areas closely related to citizens' lives and self-serving acts that hinder the realization of a fair economy."

◆Significant Reduction in Tax Audits This Year... Promotion of 'Hometax 2.0'= Considering the difficult economic situation due to the novel coronavirus disease (COVID-19), the NTS will significantly reduce the number of tax audits this year. To ensure that tax audits do not become an obstacle to overcoming the crisis, the total number of audits will be reduced from 16,008 cases last year to around 14,000 cases this year. Verification of reported contents for major tax items such as income tax will also be limited, reduced by 20% compared to the previous year.

Moreover, the NTS will thoroughly implement measures to reduce tax burdens and provide tax support for self-employed and small business owners, extended until the end of this year, to support economic vitality recovery.

In addition, the NTS will promote Hometax 2.0, a digital technology-based platform that enhances taxpayer convenience. This is a customized platform where taxpayers can check everything at a glance from notification of filing guidance to filing and payment.

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 said, "Let us overcome the current difficulties together with extraordinary determination and confidence that 'we can do it.' Furthermore, as we face the era of post-COVID, let us create a new history of change once again," and emphasized, "We will surely realize a new national tax administration where sincere taxpayers are more comfortable and intentional tax evaders are dealt with more strictly, a 'national tax administration that is comfortable for the people and better than before.'"

This meeting was the first tax office chiefs meeting held after Commissioner Kim's inauguration. Considering the social distancing level 2 measures due to COVID-19, only 42 key personnel including regional directors, senior officials, and the main department heads in charge of the meeting attended. The tax office chiefs meeting is held twice a year by the NTS.

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