More audit waivers for compliant foreign firms

National Tax Service Assistant Commissioner Kim Yeon-geun delivers a speech at The Korea Times Tax Forum at the Matrix Hall in Seoul Museum, northern Seoul, Tuesday. / Korea Times photo by Shim Hyun-chul

By Cho Mu-hyun

The National Tax Service (NTS) said Tuesday it will give certain tax audit waivers to more foreign businesses and small- and medium-sized enterprises (SMEs).

Speaking at the first Korea Times Tax Forum at the Matrix Hall, Seoul Museum, Kim Yeon-geun, assistant commissioner for international taxation at the NTS, said foreign companies with “longstanding compliance records and contributing in creating jobs” will receive benefits such as waivers.

“We will designate more compliant foreign companies as exemplary taxpayers so that they will receive real benefits, such as tax audit waivers, the use of VIP immigration desks at airports, and an upgrade of their credit ratings from financial institutions,” said Kim.

The service currently waives audits for companies that have paid taxes consistently and diligently. It has been vocal about limiting probes on SMEs while focusing on conglomerates and the wealthy who commonly seek to evade tax, since new Commissioner Kim Duk-joong took office in late March.

The assistant commissioner said benefits for SMEs will be applied to foreign companies as well.

“We will give foreign companies equal treatment as their Korean counterparts so that they too will not face difficulties in their business operations in Korea,” he said. “In particular, we will assist compliant companies, which comprise the vast majority of all foreign companies, in their business and investment.”

Speaking of the NTS’s recent initiative, comprehensively called “normalizing the underground economy” that will see an increase in probes against high-income professionals, wealthy individuals, offshore tax evaders and irregular transactions, he assured foreigners attending the forum that this was “not a full-fledged audit program” and compliant companies need not worry.

“Our scrutiny will only apply to evaders who hurt the tax system,” he said.

The assistant commissioner also said that the NTS will increase its staff’s expertise and knowledge of international taxation “to protect and respect foreign taxpayers better.”

“We will continue to educate and train our staff in international taxation so that their taxation of international transactions will be based on expertise and knowledge,” said the assistant commissioner.

There are currently 57 service desks for foreign taxpayers installed in NTS district offices across the nation, which will be increased to 72, said Kim.