Abstract

Any taxpayer whose rights or interests have been infringed on may request the cancellation or modification of the disposition or request other necessary disposition. This study investigates the operating state of the current tax appeal system using the statistical data of the Tax Tribunal(TT), the National Tax service(NTS), and the Board of Audit and Inspection of Korea(BAI) from 2008 to 2015, and suggests some reform measures for the system. The results are as follows. First, the cases of the lawsuit and the administrative trials(the request for adjudgment by the TT, the appeal for review by the NTS, and the request of examination by the BAI) have increased consistently. However, total number of requested cases has diminished because cases of the preassessment review and the reconsideration appeal by the NTS have decreased considerably. In addition, most taxpayers seriously prefer the request for adjudgment among the administrative trials. Second, in the settlement of tax appeals, the acceptance rates are significantly different among the types of tax in all appeal procedures, and the rates of acceptance of corporate income tax and inheritance tax are higher than other taxes. The result of examining the acceptance rate by the size of tax amount requested shows that there is a significant difference of the acceptance rate among the size of amount in the only three procedures；the request for adjudgment, the appeal for review, and the lawsuit. The acceptance rate of large cases is higher than small cases. Third, there is no significant difference between the acceptance rate of the request for adjudgment and the acceptance rate of the appeal for review. However, the acceptance rate of the request of examination by the BAI is lower than other two appeal procedures. The result of comparing the request for adjudgment with the appeal for review by the type of tax and by the size of amount shows that the acceptance rates by the type of tax of two procedures are similar. But the rates of acceptance of large cases are higher in the request for adjudgment than in the appeal for review. The findings of this study may be useful for implementing the tax appeal system to protect tax payers’rights and to enhance the rationality of the tax administration.

Keywords

• tax appeal system
• acceptance rate
• type of tax
• size of tax amount requested

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