A Proposal for Improving the Limitation and Permission of Duplicate Tax Audits through Analyzing the Tax Disputes
Asian Tax Journal Vol. 18 No. 4 (2017), pp. 147-171
Abstract
According to the Framework Act on National Taxes, the duplicate tax audits for the same tax items and the same taxation period are in principle prohibited unless otherwise specified. This study is designed to classify the tax complaints in dispute into five types and find out how the tax complaints are distributed according to the type of complaints and how they are admitted. The study showed that there have been rapid increase in the number of related tax claims since Dec. 31, 2011 when the “tax audit” was defined in Framework Act on National Taxes. More disputes were concentrated on “whether the partial audit, field inspection and the inquiry and inspection authority shall be considered as the preliminary tax audit” and “whether the matter is to be recognized as the trial for tax evasion”. The implication of this analysis is that the introduction of the definition of ‘tax audit’ in the Act has led to differences in the view of the preliminary tax audit between the taxpayer and the tax administrations and that the National Tax Service and Tax Tribunal see the scope of duplicate tax audit more broadly. As a solution to solve the problems, this study proposes the method of specifying the details in the scope of the ‘inquiry and inspection authority’ in the Tax Act to Framework Act on National Taxes and further, the transfer of the ‘inquiry and inspection authority’ from each of the Tax Act to Framework Act on National Taxes.
Keywords
- tax audit
- duplicate audit
- partial audit
- field inspection
- tax disputes
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