National Tax Service, “Verification of the whole process from donation and acquisition… Exemption from tax audit during participation in K New Deal”

Input 2021.01.28 19:32 | Revision 2021.01.28 19:38

Announced ‘2021 National Tax Administration Operation Plan’ by the National Tax Service
Home donation, YouTube’back advertisement’, reinforced family verification
K New Deal SME tax audit exemption… Reduced 2000 tax audits

The National Tax Service has decided to strict response to tax evasion and malicious arrears. Tax evasion monitoring will be strengthened for businesses and YouTubers that are booming with the novel coronavirus infection (Corona 19). The Korean version of the New Deal will provide tax support such as exemption and suspension from tax audits for small and medium-sized businesses and self-employed and small business owners affected by Corona 19.

On the 28th, the National Tax Service held the ‘2021 National Tax Office Chiefs’ Meeting’ and announced the’National Tax Administration Operation Plan’ including these details. The National Tax Service plans to verify the entire process of’after the initial acquisition → gift → gift’ for the recent increase in real estate donation ahead of taxation strengthening. It traces the source of the funds when the property was initially acquired, and checks whether the loan deposit was repaid on behalf of the rental deposit after the omission of the sum of the re-donation was omitted during the donation process, or the rental deposit was put in place.

In addition, the source of funds is also scheduled to be verified on a regular basis for young people who are suspicious of tax evasion, such as acquiring expensive real estate even though there is no source of income. An official from the National Tax Service said, “Last year, as the number of home donations has increased, the need for detailed verification has grown.”

The National Tax Service is also aggressively responding to tax evasion in industries such as food materials, kitchenware, and exercise goods, which have rapidly increased in demand due to the increase in home time due to Corona 19. It plans to thoroughly respond to tax evasion of media content creators, such as YouTubers who earn advertising marketing income through the platform or gain unfair profits through false advertising. It means that it will actively conduct tax investigations on the so-called YouTubers’ back advertisements.

The National Tax Service also plans to block anomalous tax evasion by family members who use corporate funds for expedient inheritance and donations, or cover luxury consumption such as yacht purchases. To this end, the company decided to expand the information analysis infrastructure by linking and analyzing changes in the structure of corporate assets and the status of property and consumption of the four-week family, and to constantly monitor internal and external information. In addition, the company decided to actively discover and respond to new types of offshore tax evasion, such as anomalous donation of shares in affiliated overseas subsidiaries, unfair business privileges, and concealment of foreign assets through virtual assets.

In addition, the National Tax Service decided to maintain the level of 14,000 cases, reducing the total amount of tax audits by about 2000 this year following last year to support the economic recovery.

The National Tax Service gives SMEs that receive support from the Korean version of the New Deal budget or directly carry out related projects, excluding or deferring regular tax audits, and giving them the benefit to expedite the preliminary examination of R&D tax credits (fast track). The scope of support for cleaning and the scope of the Korean version of the New Deal SMEs is being discussed by 31 ministries in the Working Support Group of the Ministry of Strategy and Finance. In addition, the requirements for cleaning support such as the exclusion of regular tax audits for SMEs that create jobs are temporarily relaxed.

In addition, the National Tax Service decided to extend the tax verification exclusion measures for small self-employed and small business owners implemented last year until the end of this year, and reviewed plans to extend the application to businesses whose sales declined sharply even though they were larger than those excluded last year. I did it. Last year, the number of small self-employed and small business owners excluded from tax verification was 6.3 million individual business owners and 600,000 corporate business owners. The criteria for exclusion of tax verification will be set by analyzing the sharp decline in sales by business type after VAT and business site status reports are completed.

Kim Dae-ji, head of the National Tax Service, said, “If you commit tax evasion while gaining unfair profits through anti-rules and privileges, or avoid legitimate tax obligations while enjoying reflexive benefits from Corona 19, you must respond more strictly from a fair perspective.”