SOUTH KOREA Law and Practice Contributed by: Steve M Kim, Philje Cho, Gijin Hong and Kyu Bin Kang, Lee & Ko
There are several avenues for taxpayers to seek a deferment of TAN issuance and tax payment in conjunction with a MAP application. However, obtaining approval for either deferment is often challenging in practice. Appeal to Administrative Bodies of the Government Time limits are also important for the TAN, because the taxpayer has 90 days after receipt to appeal to one of three administrative bod - ies of the government, namely the Tax Tribunal, the Board of Audit and Inspection (BOAI) or the NTS’s office of appeals. In the vast majority of cases, taxpayers appeal to the Tax Tribunal as it is considered more independent than the BOAI or the NTS. Another important reason to file an administrative appeal is that, under the Korean tax dispute system, the taxpayer must file the appeal and wait at least 90 days before it can file a petition to the court. The Tax Tribunal is established under the office of the prime minister and is administered by offi - cials generally seconded from the MOEF and the NTS. Like the RATI panel, the adjudicators of the Tax Tribunal are comprised of NTS officials and outside experts, and a senior official at the NTS has the final say in all decisions. Tax Tribunal proceedings are less formal than court proceed - ings but more formal than RATI proceedings. As in court proceedings, the taxpayer and the tax authority are expected to submit briefs with technical arguments and applicable evidence. The taxpayer will also be given a formal opportu - nity to speak and plead before the adjudicators, although recently some of these hearings have been held by videoconference. A typical Tax Tribunal proceeding involving a for - eign entity or a Korean entity with foreign invest -
ment, or involving an international tax issue, may last six months, although a large or complex TP case can last a year or more. During the pro - ceedings, it is also possible that the adjudica - tors may order a re-investigation, which is effec - tively a re-audit of the taxpayer. However, such a re-investigation is essentially a desk tax audit, which involves the reviewing of files prepared by the tax auditor, rather than undertaking another field examination at the taxpayer’s premises. Judicial Litigation Once a written decision has been issued and received by the taxpayer, the statute of limita - tions for filing a petition to the court is 90 days. In addition, as noted above, as long as the appeal has been filed with the Tax Tribunal for at least 90 days, the taxpayer has the option to file a petition to the district court without waiting for a decision from the adjudicators. Both the plaintiff and the defendant have the right to appeal decisions of the district courts that are wholly or partially unfavourable, and, in practice, the losing party is virtually certain to appeal a district court’s decision to the High Court that has competent jurisdiction. For exam - ple, a plaintiff appealing the decision of the Seoul Court for Administrative Matters can appeal to the Seoul High Court for Administrative Matters. The appeal period is two weeks from receipt of the written decision (unless extended due to a national holiday) and must be strictly adhered to. Under the Korean judicial appeal system, all decisions of the High Court can be appealed to the Supreme Court within two weeks from receipt of a written decision by the appealing party. At all stages of tax litigation, the right of appeal is automatic, without having to seek per - mission, either from the original court or from the appeal court.
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