Announcement of National Tax Administration Operation Plan at the Meeting of Heads of Tax Offices Nationwide
"Tracking and Taxing Unearned Income from Real Estate to the End"
[Asia Economy Reporter Kwangho Lee] The National Tax Service (NTS) has set its sights on real estate speculation this year. This move is interpreted as a proactive response to President Moon Jae-in's policy stance for this year, which declared a "war on real estate speculation." The NTS also plans to crack down strongly on illicit succession of management rights by large conglomerate owners' families, preferential treatment of former officials, and high-income professionals and expensive private education. It also showed its intention to reduce the total number of investigations to revive the vitality of the people's economy.
On the 29th, the NTS held the 2020 nationwide tax office chiefs meeting at the Government Complex Sejong, chaired by NTS Commissioner Kim Hyun-joon, and finalized and announced the first half 'National Tax Administration Operation Plan' with these contents. A total of 313 tax office chiefs nationwide attended the meeting. The nationwide tax office chiefs meeting is held twice a year by the NTS.
Commissioner Kim, who presided over the meeting, emphasized, "We will strictly respond to intelligent tax evasion and delinquency that go against the realization of a fair society, such as thoroughly tracking and taxing unearned income through real estate," and added, "In particular, we will strictly respond to illicit gift transfers related to the acquisition of high-priced houses, tax evasion by multi-homeowners and landlords."
The NTS will first conduct a full analysis of the sources of funds for acquiring high-priced houses using financing plans and other documents, and thoroughly investigate suspicions of tax evasion such as disguised gifts. In particular, it will manage the entire debt repayment process after acquiring high-priced houses and focus on analyzing the sources of funds for large deposit tenants. It also plans to investigate suspicions of tax evasion by real estate corporations established to avoid reporting rental income through the use of borrowed accounts by multi-homeowners and to evade combined taxation.
Along with this, the NTS plans to strictly punish illicit tax evasion such as the operation of borrowed stocks by large conglomerates and their owners' families, unfair support among affiliates, unfair mergers, and management succession through indirect capital transactions. It plans to conduct a full inspection of false reporting suspicions related to preferential treatment in subcontracting and order allocation to eradicate private profit-seeking acts that hinder fair competition. It will also expand regular verification of property changes and actively utilize mortgage lien data to closely examine the inheritance of wealth by high-net-worth individuals and young people.
Furthermore, it will strengthen tax audits in professional fields such as former officials who abuse superior positions and privileges to earn huge income without sincere reporting, as well as in hospitals and clinics. It will actively respond to tax evasion that harms the livelihood of ordinary people by profiteering in areas closely related to people's lives, such as expensive private education, entrance exam consulting, and illegal lending businesses.
In addition, the NTS will reduce the total number of investigations and expand simplified investigations, excluding small corporations that have faithfully fulfilled their tax cooperation obligations from irregular investigations in principle. It will also faithfully implement tax burden reduction and tax administration support measures for self-employed and small business owners extended until the end of this year to support economic vitality recovery.
Moreover, it will support voluntary and sincere reporting through big data analysis and full expansion of mobile Hometax, and operate exclusive airport business centers for model taxpayers and a pre-consultation system for investigation timing. It will also promote the discovery and support of small business operators through the newly established 'Tax Administration Support Promotion Team' in tax offices and regional tax offices.
Commissioner Kim said, "We will actively implement tax administration support for self-employed and small business owners so that it can be felt on the ground," and added, "We will realize national tax administration that the public sympathizes with and trusts through the spread of proactive administration, a new public service paradigm, and enhancement of the integrity of national tax officials."
Deputy Prime Minister and Minister of Economy and Finance Hong Nam-ki urged in his congratulatory remarks on the day, "Please do your best to ensure stable tax revenue budget procurement, strict response to tax evasion and delinquency, and support for inclusive and innovative growth at the national tax administration level."
Meanwhile, in his congratulatory remarks, Deputy Prime Minister and Minister of Economy and Finance Hong Nam-ki said, "We will advance the tax system by reflecting overseas advanced cases and international discussions and take the lead in protecting taxpayers' rights," adding, "We will prepare a comprehensive reform plan for financial taxation, including adjusting capital gains tax on stocks and securities transaction tax for capital market advancement, and prepare taxation measures on income from individual virtual currency transactions."
He particularly emphasized, "It is necessary to actively respond to the OECD digital tax discussions to prevent domestic taxing rights from being lost to foreign countries."
Following Deputy Prime Minister Hong, he also expressed his intention to strengthen tax support for investment and consumption to enhance economic vitality and innovation momentum. He mentioned, "We plan to expand R&D tax support for core materials, parts, and equipment, reform tax support for small and medium-sized enterprises to be investment- and employment-friendly, and promote tax support for domestic travel accommodation expenses." He also explained, "To strengthen the inclusiveness of our economy, we will expand the earned income tax credit for low-income groups and strengthen tax support for companies that increase employment of the elderly, thereby expanding tax support for socially vulnerable groups."
Additionally, he added, "We will also make every effort to improve tax fairness and secure fiscal revenue through performance evaluation and feedback on 52 tax support systems that expire this year."
After his congratulatory remarks, Deputy Prime Minister Hong told reporters that when asked about plans for an additional supplementary budget related to the novel coronavirus, "I said if it is insufficient, we will use contingency funds. There is no plan for a supplementary budget."
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