The National Tax Service (NTS) is moving to establish a dedicated team to track and collect overseas hidden assets from high-profile tax delinquents. The initiative aims to enhance cooperation with foreign tax authorities and consolidate the collection and management of unpaid national tax revenue, including fines and penalties, which are currently scattered across various government departments.
On September 28, the National Tax Administration Reform Committee held a meeting at the Seoul Regional Tax Office to discuss the operational direction for tax investigations in the second half of the year, strengthening the collection of overseas hidden assets, and integrating the collection of unpaid national tax revenue.
The NTS plans to set up the first dedicated team for linking tax investigations and delinquent tracking within the regional offices. This team will consist of experts in delinquency, irregular investigations, and international inquiries to investigate asset concealment activities aimed at evading tax enforcement. If corporate tax evasion is confirmed, the NTS intends to gradually integrate tax investigations against the relevant corporations.
Currently, the Tax Collection Bureau conducts asset tracking investigations through financial tracing and searches, as well as investigations into actions aimed at evading tax enforcement. However, a lack of experience in tax violation cases and insufficient sharing of information on tax evasion and asset concealment between tax investigations and delinquent tracking have been identified as areas for improvement. The dedicated team will address these limitations and strengthen the connection between investigations and collections.
International cooperation will also be expanded to recover overseas hidden assets. Currently, collection cooperation is possible with 77 countries, including Japan and Australia, but domestic enforcement authority does not extend overseas, making cooperation with local tax authorities essential. Even if overseas assets are identified, requests for seizure and collection must be made to the respective countries.
To expedite enforcement, the NTS plans to increase the number of practical agreements that specify collection cooperation procedures, annual request frequencies, and monetary limits. Information exchange with countries at high risk for asset concealment, such as Cambodia and Liberia, will also be continuously strengthened.
During the meeting, the committee discussed plans to consolidate the collection and management of unpaid national tax revenue under the NTS. Currently, unpaid national tax revenue, including fines, penalties, and public property rental fees, is individually assessed and collected by 64 different government departments based on over 300 laws. The amount of unpaid revenue has increased from 13.3 trillion won in 2020 to 16.2 trillion won in 2024.
The NTS explained that the lack of unified collection regulations and insufficient expertise and income and asset information among various agencies limit effective collection. Therefore, the NTS is pursuing the enactment of a consolidated collection law that includes provisions for seizure, public auction, disclosure of delinquent lists, utilization of tax information, and centralization of delinquent collection authority within the NTS. This bill was introduced in February of this year and was submitted to the relevant standing committee in April, where it was referred to a subcommittee.
Before implementing the system, the NTS plans to integrate delinquent information from various departments and establish a system that utilizes NTS tax information, while also reinforcing dedicated organizations and personnel. As a preparatory measure, a delinquent management team composed of 7,000 temporary workers is currently verifying the status of 4.24 million delinquent taxpayers with an estimated total of 16 trillion won in unpaid taxes from July to December of this year.
Measures to reduce the tax investigation burden on compliant taxpayers will also be implemented. The deadline for the regular tax investigation exemption for small businesses with sales under 1 billion won has been extended from the end of June to the end of December this year. Additionally, small businesses that receive awards from the Prime Minister or higher for contributions to small business development or venture startups after 2026 will also be included in the exemption. The exemption period for regular investigations for businesses located in regional areas will be extended to a maximum of three years.
According to the NTS, since implementing measures to minimize on-site investigations in October of last year, the average duration of regular tax investigations has decreased from 52 days to 33 days as of the end of August this year. Of the 3,530 cases where a notice was sent regarding the selection of investigation periods from April to August this year, 88% were conducted during the periods preferred by the taxpayers.
Conversely, the NTS plans to take strict action against tax evasion involving the personal use of high-value corporate properties, stock market manipulation, and price collusion that harms public welfare.
The committee plans to continue discussions on the recovery of overseas hidden assets and the integrated collection of unpaid national tax revenue at the National Tax Administration Forum, which will be co-hosted with the Korea Institute of Public Finance in the second half of this year.
* This article has been translated by AI.
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