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SEOUL METROPOLITAN GOVERNMENT OPERATING RULE ON TAX INVESTIGATIONS

SEOUL METROPOLITAN GOVERNMENT OPERATING RULE ON TAX INVESTIGATIONS
Amendment of Other Laws No. 4606, Dec. 29, 2023 Whole Amendment No. 4684, Jan. 20, 2025

CHAPTER I GENERAL PROVISIONS Article 1 (Purpose) The purpose of this Rule is to enhance efficiency in tax investigations, while maximizing protection of rights and interests of taxpayers, by prescribing rules that shall be observed in conducting tax investigations in connection with taxes levied by the Seoul Metropolitan Government (hereinafter referred to as "municipal taxes") pursuant to Article 140 of the Framework Act on Local Taxes. <Amended by Rule No. 4166, Jun. 1, 2017>

CHAPTER I GENERAL PROVISIONS Article 1 (Purpose) The purpose of these Rules is to prescribe the obligations regarding investigations of matters pertaining to the municipal taxes of Seoul Metropolitan City, in order to protect the rights and interests of taxpayers and contribute to the efficient discharge of tax investigation affairs.

Article 2 (Definitions) The terms used in this Rule are defined as follows: <Amended by Rule No. 4143, Feb. 23, 2017; Rule No. 4166, Jun. 1, 2017; Rule No. 4247, Oct. 18, 2018; Rule No. 4351, Jun. 4, 2020>
1. The term "tax investigation" means an activity of questioning, examining, or investigating books of account, documents, and other articles (hereinafter referred to as "books of account, etc."), or ordering submission thereof, conducted to levy and collect local taxes;
2. The term "investigative officer" means a tax officer to whom a tax investigation of a specific taxpayer is delegated by the Mayor of the Seoul Metropolitan Government (hereinafter referred to as the "Mayor") or the head of a Gu under the jurisdiction of the Seoul Metropolitan Government (hereinafter referred to as "the head of a Gu");
3. The term "investigation manager" means the head of a division responsible for affairs regarding tax investigations who directly instructs and supervises investigative officers;
4. The term "general tax investigation" means an investigation conducted on a regular basis to ascertain whether requirements for levying a local tax on a specific taxpayer are met, whether the tax base or the tax rate applied to a specific taxpayer is appropriate, whether non-taxation or tax reduction or exemption is appropriate (hereinafter referred to as "appropriateness of taxation"), etc.;
5. The term "special tax investigation" means a tax investigation conducted where it is impracticable to produce actual results by conducting a general tax investigation in the light of methods for tax omissions and amounts of taxes omitted;
6. The term "direct tax investigation" means a tax investigation conducted by visiting a taxpayer's office, factory, place of business, residence, or other place to investigate the taxpayer or a person who has a relationship with the taxpayer, face to face;
7. The term "documentary tax investigation" means a tax investigation conducted based upon a tax return or documents submitted by a taxpayer, in addition to a direct tax investigation;
8. The term "overall tax investigation" means a tax investigation conducted by integrating items of taxation subject to payment for the period during which a tax investigation into a taxpayer is conducted;
9. The term "partial tax investigation" means a tax investigation conducted on a specific item or part on part of a transaction;
10. The term "computerized analysis" means a tax investigation conducted through computerized analysis, etc. of electronic data used to retain and manage the status of local taxes paid by taxpayers, details of their tax returns, etc. for the management of the sources of local taxes, of taxation data gathered to levy and collect local taxes, and of other data.

Article 2 (Definition) The definitions of the terms used in these Rules shall be as follows:
1. "Tax investigation" refers to the activities of the investigating official, based on the authority to inquire and inspect prescribed by the Framework Act on Local Taxes (hereinafter referred to as the “Act”), including questioning persons such as taxpayers or entities found to have engaged in transactions with a taxpayer, and inspecting, investigating, or ordering the submission of, relevant books, documents or other items (hereinafter referred to as “books”) after advance notice or notice of tax investigation under the investigation plan, for the assessment and collection of Seoul Municipal City’s municipal taxes (hereinafter “municipal taxes”) by the taxpayer.
2. "On-site verification" refers to the presence of an investigating official on site, who, while not actually conducting a tax investigation, discharges the following duties with regard to taxpayers or entities found to have engaged in transactions with a taxpayer(s), etc.
(a) Verification of the facts in order to collect evidence prior to the start of an investigation, or to select the subject of a tax investigation (hereinafter referred to as the “investigation subject”);
(b) Verification of the facts, such as a taxpayer’s customers or transactions with another party, in the course of an investigation;
(c) Verification of the facts concerning any cause for additional collection of taxes, or determination of whether to apply heavy taxation after applying tax exemptions or deductions under the laws governing local taxation;
(d) Data consisting of suspicious data, disguised or fictitious data, or data derived from an investigation of an offense, which can be confirmed by simple factual verification;
(e) Verification of financial transactions, such as bank accounts, for factual verification of a taxpayer’s transactions;
(f) Verification of the current status of a taxpayer’s place of business or bookkeeping records;
(g) On-site appearance and verification to handle complaints, one-time verification duties for the handling of tax evasion reporting data, taxation ledgers, taxation data, etc.;
(h) Other causes equivalent to items (a) to (g) due to work necessitating on-site travel for the purpose of verification rather than investigation.
3. "Investigating official" refers to a tax official who is ordered by the Seoul Metropolitan City Mayor (hereinafter referred to as the “Mayor”) or the competent head of a Gu in Seoul Metropolitan City (hereinafter referred to as a “head of Gu”) to conduct a tax investigation of a specific taxpayer.
4. "Investigation chief" refers to the head of the department in charge of tax investigation who personally directs and supervises an investigating official.
5. "Periodic selection" refers to the selection of investigation subjects by the method under Article 82 (1) of the Act.
6. "Occasional selection" refers to the selection of investigation subjects under Article 82 (2) of the Act by a method other than periodic selection.
7. "General tax investigation" refers to a tax investigation conducted by periodic selection to verify whether the requirements for local taxation are met, and to confirm the appropriateness of the tax base and tax rate, the appropriateness of tax exemption or reduction, etc. of a specific taxpayer.
8. "Special tax investigation" refers to a tax investigation conducted on the basis of a tax investigation plan separately from a general tax investigation.
9. "Urgent tax investigation" refers to a tax investigation conducted immediately when early securing of tax receivables is required.
10. "Joint investigation" refers to a tax investigation conducted jointly by two or more heads of local governments.
11. "Direct investigation" refers to a tax investigation conducted by visiting a taxpayer’s main office, main business, address, etc.
12. "Written investigation" refers to a tax investigation conducted at the investigating agency with books submitted by the taxpayer and not by direct investigation.
13. "Integrated investigation" refers to an investigation of all reporting- and payment-obligated municipal tax items together for the relevant taxable period..
14. "Tax item investigation" refers to a tax investigation conducted solely on a specific tax item.
15. "Partial investigation" refers to a tax investigation limited solely to the necessary parts.



Article 3 (Basic Principles of Tax Investigation) Every tax investigation shall be carried out in good faith in accordance with the following principles: <Amended by Rule No. 4143, Feb. 23, 2017; Rule No. 4247, Oct. 18, 2018>
1. Principle of good faith:
Every tax investigation shall be executed in good faith, and in particular, no action shall be taken against a taxpayer in contravention of any of the rules already published;
2. Principle of documentary taxation:
Every tax investigation and the exercise of tax-levying power shall be based on objective evidence, such as corporate books of account and evidentiary materials related thereto, and shall be convincing to taxpayers;
3. Principle of proportionality in investigation:
Every tax investigation shall be conducted only to the minimum extent necessary for attaining the objectives of the tax investigation;
4. Principle of separate investigation of each taxpayer:
Every tax investigation shall be conducted separately in view of the level of integrity of tax returns filed, the type of business, and other objective criteria.

Article 3 (Relationship to Other Rules) Except where otherwise provided in other rules, tax investigations shall be governed by these Rules.



Article 4 (Duty to Maintain Confidentiality) No investigative officer shall provide or disclose the data, etc. he or she has acquired in the course of a tax investigation, or use such data for other purposes than the intended purposes. <Amended by Rule No. 4351, Jun. 4, 2020>

Article 4 (Basic Principles of Tax Investigation) An investigating official shall conduct tax investigations in good faith according to the following principles:
1. Principle of good faith: Tax investigations shall be executed diligently and in good faith, and no measures shall be taken that run counter to prior public announcements made to taxpayers.
2. Principle of documentary taxation: The power of tax investigation and imposition shall be exercised on the basis of objective evidence, such as corporate account books and relevant evidential data.
3. Principle of proportionate investigation: Tax investigations shall be conducted within the minimum scope necessary to achieve the purpose of the investigation.



Article 5 (Jurisdiction over Tax Investigation) (1) A tax investigation shall be performed by the head of the Gu having jurisdiction over the tax domicile of the municipal tax at issue pursuant to Article 3 (1) of the Seoul Metropolitan Government Framework Ordinance on Municipal Taxes: Provided, That in cases deemed necessary to conduct a tax investigation, such as where the head of a Gu requests a tax investigation or where local taxes are evaded, refunded, or reduced in a unjust manner, the Mayor himself or herself may conduct a tax investigation. <Amended by Rule No. 4166, Jun. 1, 2017; Rule No. 4351, Jun. 4, 2020>
(2) Where deemed necessary to ensure the efficiency, etc. of a tax investigation performed under paragraph (1), the Mayor or the head of a Gu may request the head of another local government to conduct the tax investigation. <Amended by Rule No. 4351, Jun. 4, 2020>

Article 5 (Confidentiality Obligation) An investigating official shall not provide or divulge to any other person or party data, etc. obtained in connection with a tax investigation, nor use such data, etc. beyond its specified purpose.




Article 6 (Cooperation in Tax Investigation) (1) If the Mayor or the head of a Gu needs cooperation from another local government because a taxpayer's domicile and place of business (or the address of his or her head office or principal place of business; the same shall apply hereinafter) is not within the jurisdiction over the taxpayer's tax domicile, the Mayor or the head of the Gu shall request the head of such other local government to cooperate in an investigation, before the commencement of the investigation or while conducting the investigation, clearly stating the matters for which cooperation is sought in detail.
(2) Where the Mayor or the head of a Gu receives a request for cooperation from the head of another local government, he or she may conduct a tax investigation within the given period and give notice of results thereof. <Amended by Rule No. 4351, Jun. 4, 2020>

CHAPTER II TAX INVESTIGATION JURISDICTION Article 6 (Tax Investigation Jurisdiction) (1) Tax investigations shall be conducted by the head of the Gu with jurisdiction over the place of municipal tax payment under Article 3 (1) of the Seoul Metropolitan Government Framework Ordinance on Municipal Taxes: Provided, however, that the Mayor may directly conduct tax investigations upon request from a head of a Gu or for cases falling under the subparagraphs of Article 3 (4) of the Seoul Metropolitan Government Framework Ordinance on Municipal Taxes.
(2) The Mayor or a head of an autonomous Gu may conduct joint investigations in connection with tax investigations under paragraph (1), if deemed necessary to enhance the efficiency of the investigation.



Article 7 (Relationship to Other Regulations) Except as otherwise provided in other statutes or regulations including local tax-related laws regarding tax investigations in connection with local taxes, this Rule shall apply.
[This Article Wholly Amended by Rule No. 4351, Jun. 4, 2020]

Article 7 (Cooperation with Tax Investigations) (1) The Mayor or a head of an autonomous Gu may request cooperation from the head of a local government with jurisdiction over an address (including the location of a head office or main office), business establishment, or customer in, where investigation of taxation data and on-site verification, etc. of such address, business, or customer is required.
(2) The Mayor or a head of an autonomous Gu may request support for matters pertaining to an investigation, such as mutual consultation on methods of investigation and support for investigative personnel.




CHAPTER II SELECTION OF PERSONS SUBJECT TO INVESTIGATION Article 8 (Selection of Persons Subject to Tax Investigation) The persons to be subject to general tax investigation and persons to be subject to special tax investigation shall be separately selected according to the level of integrity of tax returns filed with respect to municipal taxes and of tax payments, the type of business, and other relevant criteria. <Amended by Rule No. 4351, Jun. 4, 2020>

CHAPTER III SELECTION OF INVESTIGATION SUBJECTS Article 8 (Principles of Selecting Investigation Subjects) (1) The Mayor or a head of an autonomous Gu shall select investigation subjects by fair and objective criteria. Investigation subjects shall be selected within the minimum scope necessary to induce taxpayers to report and pay taxes in good faith, and to achieve the goal of fair taxation.
(2) An investigating official, when handling matters concerning the selection of an investigation subject, shall presume that the taxpayer acts in good faith and that the documents, etc. submitted by the taxpayer are truthful, unless there are special circumstances to believe otherwise.



Article 9 (Maintenance of Fairness and Validity of Selection Criteria) In establishing criteria for selecting persons to be subject to investigation, the fairness and validity of tax investigations shall be maintained by applying clear and objective criteria convincing to taxpayers.

Article 9 (Method of Selecting Investigation Subjects) (1) Investigation subjects shall be selected by periodic or occasional selection.
(2) Investigation subjects shall be selected on a periodic basis after deliberation by the Seoul Municipal Government Local Taxation Deliberation Committee. In such a case, information such as the name of the corporation, name of the representative, and the business location shall not be indicated to prevent identification of the subject under deliberation.
(3) The cause of occasional selection shall be confirmed by objective procedures such as the collection of taxation data and on-site verification.
(4) The Mayor or the head of an autonomous Gu shall make efforts to maintain an appropriate ratio of investigations considering the level of good-faith reporting by business category, scale, etc., in selecting investigation subjects under paragraph (2).



Article 10 (Respect for Compliant Tax Returns Filed by Taxpayers) The Mayor and the head of a Gu shall select persons to be subject to investigation within the minimum extent necessary for inducing taxpayers to voluntarily file compliant tax returns and pay taxes and for realizing fair taxation. <Amended by Rule No. 4247, Oct. 18, 2018>

Article 10 (Tax Investigation Reprieve) (1) The Mayor or the head of an autonomous Gu may grant a tax investigation reprieve of up to three years from the day on which the cause occurs for any of the following taxpayers:
1. A person selected as a distinguished taxpayer under subparagraph 3 of Article 2 of the Seoul Metropolitan Government Ordinance on Support for Model Taxpayers, Etc.;
2. A small enterprise under subparagraph 2 of Article 2 of the Framework Act on Small and Medium Enterprises, or a microenterprise under subparagraph 1 of Article 2 of the Framework Act on Microenterprises;
3. An enterprise that has received the Mayor’s confirmation at or above a certain level regarding the creation of a working environment with a healthy work-life balance under subparagraph 3 of Article 2 of the Seoul Metropolitan Government Ordinance on Gender Equality in Employment and Support for Work-Life Balance;
4. A small or medium enterprise selected by the Minister of Employment and Labor as a Korea Job Creation Champion;
5. A small or medium enterprise certified by the Minister of Gender Equality and Family as a Family-Friendly Enterprise.
(2) Notwithstanding paragraph (1), no reprieve of a tax investigation shall be granted under any of the following circumstances, and if a taxpayer falling under the following is granted a reprieve, such reprieve shall be canceled:
1. Where a taxpayer falls under any of the subparagraphs of Article 82 (2) of the Act;
2. Where there is a need for an urgent tax investigation to secure tax receivables early, etc.;
3. Where a part of a transaction needs to be confirmed while investigating the other party to the transaction;
4. Where a taxpayer falling under any of the subparagraphs of paragraph (1) acquires real estate at a price of KRW 10 billion or higher per acquired object before the reprieve of a tax investigation and the exclusion period for imposition on the acquired real estate under Article 38 (1) of the Act expires during the reprieve periodunder Article 38 (1) of the Act expires during the period of reprieve: Provided, however, that the same shall not apply in cases where a tax investigation is conducted on the acquired real estate;
5. Where there are municipal tax arrears (including arrears on a trust property that the truster has entrusted to a trustee under the Trust Act).



Article 11 (Persons Subject to General Tax Investigation) (1) The Mayor and the head of a Gu shall comprehensively examine the current status of comprehensive management of taxable sources of relevant taxpayers and tax returns filed thereby in writing to select persons to be subject to general tax investigation and shall select the persons to be subject to the direct tax investigation under paragraphs (4) in a fair manner in accordance with objective criteria, considering the type of acquisition of property, the amount of the local tax reduction or exemption, the size of business (capital, the amount of acquisition, the number of employees, etc.): Provided, That if the number of cases subject to selection for an annual investigation exceeds 30 cases, the persons shall be selected through the Local Tax Deliberation Committee. <Amended by Rule No. 4247, Oct. 18, 2018; Rule No. 4351, Jun. 4, 2020>
(2) Meetings of the Local Deliberation Committee with regard to selection of persons to be subject to general tax investigation under paragraph (1) shall be conducted without stating the names of corporations, the names of their representatives, the addresses of their places of business, etc. so that members cannot ascertain the persons to be subject to general tax investigation. <Newly Inserted by Rule No. 4351, Jun. 4, 2020>
(3) Where jurisdiction over a tax investigation is transferred to the Mayor under the proviso of Article 5 (1) but the Local Tax Deliberation Committee under paragraph (1) excludes persons from a tax investigation, the head of a Gu shall perform a tax investigation. <Newly Inserted by Rule No. 4351, Jun. 4, 2020>
(4) In principle, the head of a Gu shall conduct a general tax investigation in the form of a documentary tax investigation but may conduct a direct tax investigation in any of the following cases: <Amended by Rule No. 4351, Jun. 4, 2020>
1. Where a person fails to submit documents for the documentary tax investigation or submits documents made dishonestly;
2. Where the total amount of wages paid by a corporation whose capital is at least one billion won or paid to employees is at least the amount obtained by multiplying by 50 the amount prescribed in Article 85-2 (2) of the Enforcement Decree of the Local Tax Act;
3. Where a person acquired real property worth at least one billion won;
4. Where a person has been granted an exemption or reduction of local taxes of at least 10 million won;
5. Other cases where the heads of other lower tier local governments request tax investigations or the heads of other local governments deem tax investigations necessary.
(5) If it is necessary for preventing double investigation of the same taxpayer, creating a climate for voluntary tax payment, supporting economic and social policies efficiently, etc., certain taxpayers may be excluded from those subject to investigation to the extent that such exclusion does not undermine fairness. <Amended by Rule No. 4351, Jun. 4, 2020>

Article 11 (Prohibition of Redundant Investigations) An investigating official may not re-investigate the same taxpayer for the same tax item in the same tax year; and, if a redundant investigation is confirmed after the start of a tax investigation, the investigation shall be immediately withdrawn: Provided, however, that the same shall not apply in situations falling under the subparagraphs of Article 80 (2) of the Act.




Article 12 (Persons Subject to Special Tax Investigation) (1) A person to be subject to a special tax investigation shall be a person who has made or is suspected to make any tax omission based on data regarding tax evasions, and specific selection criteria may by determined by the Mayor or the head of a Gu. <Newly Inserted by Rule No. 4351, Jun. 4, 2020>
(2) A person may be selected to be subject to a special tax investigation under paragraph (1) only in any of the following cases: <Amended by Rule No. 4166, Jun. 1, 2017; Rule No. 4247, Oct. 18, 2018; Rule No. 4351, Jun. 4, 2020>
1. In any of the cases referred to in the subparagraphs of Article 82 (2) of the Framework Act on Local Taxes (hereinafter referred to as the "Act");
2. Where it is necessary to conduct a tax investigation due to a change in a judicial precedent, guidelines, or an authoritative interpretation related to local tax-related laws;
3. Where it is found, in the course of guidance and supervision under Article 167 of the Local Autonomy Act, that a person is suspected to have made any tax omission in an autonomous Gu that shall levy and collect taxes of the Seoul Metropolitan Government with delegated authority;
4. Where the head of a Gu requests a special tax investigation or where the Mayor concludes that it is impracticable to attain the objectives of a tax investigation by conducting a general tax investigation due to any of the reasons referred to in subparagraphs 1 through 3.
(3) If the number of persons to be subject to special investigation under paragraph (1) or the number of cases subject to the selection for an annual investigation does not exceed 30 cases, the Mayor or the head of a Gu shall select persons to be subject to investigation fairly in accordance with a separate plan and objective criteria, taking into consideration the type of tax omission, the type of acquisition of property, the amount of exemption or reduction of local taxes, the size of business (capital, the amount of acquisition, the number of employees, etc.), and other factors. <Amended by Rule No. 4247, Oct. 18, 2018; Rule No. 4351, Jun. 4, 2020>
[Moved from Article 13; previous Article 12 deleted <by Rule No. 4351, Jun. 4, 2020>]

CHAPTER IV FORMULATION AND PREPARATION OF A TAX INVESTIGATION PLAN Article 12 (Formulation of an Investigation Plan) (1) The Mayor or the head of an autonomous Gu shall first formulate an investigation plan before conducting a general or special tax investigation of a specific taxpayer: Provided, however, that an urgent tax investigation may be conducted without having to formulate an investigation plan.
(2) An investigation plan under paragraph (1) shall include the following matters:
1. Purpose of the tax investigation;
2. Matters pertaining to the formation of an investigation team;
3. The investigation subject and the reasons for selection thereof;
4. Method of investigation;
5. Investigation period, period subject to investigation, and scope of investigation;
6. Other matters necessary in connection with the conduct of the investigation.
(3) An investigating official may conduct on-site verification for the purpose of formulating investigation plans, such as the selection of investigation subjects, determination of methods of investigation, and setting of the period and scope of the investigation.



Article 13 (Persons Subject to Partial Tax Investigation) A person may be selected to be subject to a partial tax investigation in any of the following cases where it is deemed that the objectives of such investigation can be attained based upon the verification of a specific item or part of taxable sources or upon part of a transaction:
1. Where verification is necessary for addressing a request for correction, etc. under Article 50 (3) of the Act or for determining local tax refunds under Article 60 (1) of the Act;
2. Where verification, etc. of factual relevance is necessary following the determination of a re-investigation under Article 96 (5) of the Act (including cases applied mutatis mutandis pursuant to Article 100 of the Act) or under the proviso of Article 88 (5) 2 of the Act;
3. Where verification is necessary with regard to part of a transaction in the course of a tax investigation of the other party to a such transaction;
4. Where specific information is given with regard to suspected tax evasions by taxpayers and verification thereof is necessary;
5. Where verification is necessary with regard to suspected tax omissions made by using a false name, borrowed bank account, etc.;
6. Where an urgent investigation is necessary for securing tax claims as there is a specific suspicion that the details of a specific transaction, such as a fraud transaction or fictitious transaction, are not the same as the facts.
[This Article Wholly Amended by Rule No. 4351, Jun. 4, 2020]
[Previous Article 13 moved to Article 12 <by Rule No. 4351, Jun. 4, 2020>]

Article 13 (Investigation Method) (1) The Mayor or the head of an autonomous Gu shall decide between a direct or written investigation when formulating an investigation plan, taking into consideration the reasons for selecting the investigation subject, the type and scale of the business, its history of tax payments, its current state, taxation information, etc. as a whole.
(2) A written investigation shall be conducted where it is found that the purpose of a tax investigation may be achieved without a direct investigation, considering the taxpayer’s business environment, the characteristics of the business type or region, investigative efficiency or taxpayer convenience, etc.
(3) A direct investigation shall be conducted in cases other than those in paragraph (2): Provided, however, that methods of direct and written investigation may be used in parallel, if unavoidable, in order to ensure the efficiency of an investigation, etc.



Article 14 (Deferment of Tax Investigation for Micro or Compliant Enterprises) (1) If any of the following persons has no delinquent local tax as at the date of selection eligibility for deferment, the person shall be granted deferment of tax investigations for three years: <Amended by Rule No. 4166, Jun. 1, 2017; Rule No. 4351, Jun. 4, 2020>
1. A person who has acquired real property worth less than one billion won, during the latest five years;
2. A person selected as a taxpayer of merit pursuant to subparagraph 3 of Article 2 of the Seoul Metropolitan Government Ordinance on the Support for Exemplary Taxpayers;
3. A small enterprise defined by Article 2 (2) of the Framework Act on Small and Medium Enterprises or a micro enterprise defined by Article 2 of the Act on the Protection of and Support for Micro Enterprises: Provided, That a small enterprise or a micro enterprise who has acquired real property worth at least two billion won during the latest five years shall be excluded herefrom;
4. Exemplary small and medium enterprises in employment certified under the Seoul Metropolitan Government Ordinance on Certification of and Support for Exemplary Enterprise in Employment;
5. Small and medium enterprises that are on the list of the 100 Exemplary Enterprises in Employment Creation certified by the Ministry of Employment and Labor.
(2) Notwithstanding paragraph (1), a person shall not be eligible for the deferment of tax investigations in either of the following cases: <Amended by Rule No. 4351, Jun. 4, 2020>
1. If any information is found with regard to tax evasions by the relevant corporation;
2. If a corporation registered as a construction business entity performs construction works worth at least 10 billion won in contract prices during a year;
3. If a corporation has more than 50 employees.

Article 14 (Scope of Investigation) (1) A tax investigation shall in principle be conducted as an integrated investigation.
(2) Notwithstanding paragraph (1), a tax item investigation may be conducted in cases falling under any of the subparagraphs of Article 84-3 (2) of the Act.
(3) Notwithstanding paragraphs (1) and (2), a partial investigation may be conducted with respect to any parts that fall under the subparagraphs of Article 84-3 (3).



CHAPTER III PRACTICES OF TAX INVESTIGATIONS Article 15 (Prohibition on Double Investigation) (1) The same taxpayer shall not be re-investigated with regard to the same tax item or in the same taxable year, and an investigation shall be withdrawn immediately even after the investigation has begun, if it is found that the investigation constitutes double investigation: Provided, That the foregoing shall not apply in any of the cases referred to in the subparagraphs of Article 80 (2) of the Act: <Amended by Rule No. 4166, Jun. 1, 2017; Rule No. 4247, Oct. 18, 2018; Rule No. 4351, Jun. 4, 2020>
1. Deleted; <by Rule No. 4351, Jun. 4, 2020>
2. Deleted. <by Rule No. 4351, Jun. 4, 2020>
(2) When the Mayor or the head of a Gu formulates a plan for tax investigations, he or she shall take measures necessary for preventing double investigation. <Amended by Rule No. 4247, Oct. 18, 2018; Rule No. 4351, Jun. 4, 2020>
(3) Where a taxpayer who has undergone a partial tax investigation becomes subject to an overall tax investigation, the part into which the partial tax investigation has been conducted shall be deemed to have been investigated. <Amended by Rule No. 4351, Jun. 4, 2020>

Article 15 (Investigation Period) (1) The Mayor or the head of an autonomous Gu shall set the minimum period necessary for a tax investigation up to 20 days, considering that the investigation subject, tax items, period, business type, scale, investigation difficulty, etc.: Provided, however, that for any cause that falls under any of the subparagraphs of Article 84 (1) of the Act, the duration of a tax investigation may be extended to within 20 days from the date on which such cause is resolved.
(2) The period of a tax investigation shall be counted from the day on which it is initiated to the day it ends, and shall include any Saturdays and public holidays falling within that period.



Article 16 (Observance of Scope of Investigation) When an investigative officer intends to conduct a tax investigation, he or she shall pre-determine the scope, period, and method of the investigation and observe such matters.

Article 16 (Advance Notice of Tax Investigation) (1) An investigating official shall give advance notice to the investigation subject of the matters determined in Article 83 (1) of the Act no later than 15 days before the start of a tax investigation.
(2) Notwithstanding paragraph (1), advance notice may be omitted if it is found that the goal of the tax investigation cannot be achieved due to the possible destruction of evidence, etc. if advance notice is given, and if any of the following applies. In such a case, a tax investigation notice under Article 83 (6) of the Act shall be delivered to the taxpayer:
1. Where there is a concern that books will be concealed or fabricated if advance notice is given;
2. Where there is a concern of collusion with the other party to a transaction or a third party if advance notice is given;
3. Where an urgent tax investigation is conducted to secure tax receivables;
4. Where it is found that achieving the purpose of the investigation is made infeasible by any cause equivalent to subparagraphs 1 to 3.
(3) Notwithstanding the latter part of paragraph (2), if the investigation subject refuses or avoids receipt of the tax investigation notice or closes the business, etc., the delivery of the tax investigation notice may be omitted.



Article 17 (Restriction on Expansion of Scope of Investigation) (1) Except in any of the following cases, no investigative officer shall expand the scope of tax investigation in the course thereof: <Amended by Rule No. 4166, Jun. 1, 2017; Rule No. 4247, Oct. 18, 2018; Rule No. 4351, Jun. 4, 2020>
1. If a highly probable and suspected tax omission or an error in the application of tax law is related to another taxable period or tax item and thus requiring investigation;
2. If it is necessary on any other ground to expand the scope of tax investigation because of a highly probable and suspected tax omission.
(2) Where an investigative officer expands the scope of tax investigation under paragraph (1), he or she shall give written notice of the reasons therefor and the expanded scope. <Newly Inserted by Rule No. 4351, Jun. 4, 2020>

Article 17 (Postponement of Tax Investigation, Etc.) (1) If, in response to a notice under Article 16, an investigation subject applies for a postponement of tax investigation under Article 21 of the Seoul Metropolitan Government Ordinance on Taxpayer Protection, the investigating official may not initiate a tax investigation until the taxpayer’s advocate has made a decision on the application for postponement under Article 77 (2) of the Act.
(2) If the tax investigation postponement period ends or the cause of postponement is extinguished, the investigation chief shall, without delay, direct the investigating official to initiate the investigation.




Article 18 (Methods of Investigation) Investigations may be conducted by the following methods, based upon the level of integrity of a tax return filed by the person subject to investigation, the scale of business, the type of business, outcomes of the analysis of taxation data, etc.: <Amended by Rule No. 4247, Oct. 18, 2018; Rule No. 4351, Jun. 4, 2020>
1. Where a direct tax investigation is conducted: Inspection of the books of accounts kept and recorded by the taxpayer and evidentiary documents (including electronic records when the books of accounts and evidentiary documents are prepared using computerized programs; hereinafter the same shall apply) related to such books of account; various current status inspection for examining the veracity of such books of account; investigation on customers and on-site inspection;
2. Where a documentary tax investigation is conducted: The methods of investigation under subparagraph 1 shall apply mutatis mutandis where it is impracticable to verify whether the payment of local taxes or taxation is appropriate based on the tax return filed, or the documents submitted, by the taxpayer;
3. Where a partial tax investigation is conducted: The methods of investigation under subparagraph 1 shall apply mutatis mutandis where it is impracticable to verify whether a specific item or part of the sources of local taxes or part of a transaction is appropriate.

CHAPTER V CONDUCT OF TAX INVESTIGATION Article 18 (Delivery of Charter on Taxpayers’ Rights, Etc.) An investigating official, upon initiating a tax investigation, shall deliver the Charter on Taxpayers’ Rights to the investigation subject, read it out aloud, and explain the relief procedures for breached rights, etc. under Article 76 (3): Provided, however, that this may be substituted in a written investigation by informing the investigation subject in writing of the purport of the Charter on Taxpayers’ Rights and the matters requiring explanation.



Article 19 (Limitation on Place of Investigation) (1) A tax investigation shall be conducted at the domicile, abode, office, or place of business of a person liable to pay taxes: Provided, That the foregoing shall not apply to any unavoidable case to ensure convenience for the relevant person liable to pay taxes: <Amended by Rule No. 4247, Oct. 18, 2018; Rule No. 4351, Jun. 4, 2020>
1. Deleted; <by Rule No. 4351, Jun. 4, 2020>
2. Deleted. <by Rule No. 4351, Jun. 4, 2020>
(2) Deleted. <by Rule No. 4351, Jun. 4, 2020>

Article 19 (Preparation of Integrity Pledges and Reporting Private Interests) (1) An investigation official, upon initiating a tax investigation, shall prepare an Integrity Pledge in attached Form 1 along with the investigation subject and the tax agent (referring to an attorney-at-law, certified tax accountant, or certified public accountant; hereinafter the same shall apply): Provided, however, that the preparation of the integrity pledge may be omitted in the case of written investigations.
(2) An investigating official who is, under Article 5 (1) of the Act on the Prevention of Conflicts of Interest Related to Duties of Public Servants, associated with the private interests of a person related to those duties, such as the investigation subject or a tax agent, shall report this fact to the Mayor or the head of the relevant autonomous Gu and apply for recusal.



Article 20 (Restriction on Investigation Time) A tax investigation on a taxpayer shall be conducted during the taxpayer's business hours except in special cases: Provided, That a tax investigation may be conducted also before or after business hours, upon the taxpayer's request or with the taxpayer's consent, after obtaining approval thereof from the investigation manager. <Amended by Rule No. 4351, Jun. 4, 2020>

Article 20 (Guarantee of the Right to Assistance) (1) When a taxpayer is undergoing a tax investigation, an investigation officer may cause a tax agent to participate in the investigation or state an opinion; and in such event, the tax agent shall submit a Power of Attorney in attached Form 2.
(2) A tax agent who does not submit a Power of Attorney under paragraph (1) may not participate in the tax investigation process.
(3) If a tax agent exceeds the scope of assistance provided under paragraph (1) to interfere with or delay the investigation or gives a false statement, or where there is a need for the taxpayer to make a statement personally, etc., the investigating official may make a request for the taxpayer to directly state an opinion.



Article 21 (Prior Notice of Tax Investigation) When an investigative officer intends to conduct a tax investigation, he or she shall notify tax items subject to the investigation, the period of and the reasons for the investigation, and the matters specified in the subparagraphs of Article 54 (1) of the Enforcement Decree of the Framework Act on Local Taxes, by not later than 15 days before the commencement of the investigation: Provided, That where it is deemed impracticable to attain the objectives of the tax investigation, if prior notice is given, because of the risk of destruction of evidence, etc., prior notice shall be omitted and a written notice of the tax investigation stating the reasons for such omission, etc. shall be issued when the tax investigation commences. <Amended by Rule No. 4166, Jun. 1, 2017; Rule No. 4247, Oct. 18, 2018; Rule No. 4351, Jun. 4, 2020>

Article 21 (Protection of Taxpayer Rights and Interests) Where a taxpayer’s advocate requests a correction under Article 11 (2) Seoul Metropolitan Government Enforcement Rules on Taxpayer Protection to protect the taxpayer’s rights during a tax investigation, the investigating officer shall immediately decide whether to accept such request; if the taxpayer’s advocate’s correction request lacks merit or there is a cause that renders such acceptance infeasible, the investigation chief shall notify the taxpayer’s advocate of this opinion.



Article 22 (Application for Postponement of Tax Investigation) (1) If it is impracticable for a taxpayer to whom notice of a tax investigation has been given under Article 21 to undergo the investigation due to a natural disaster or any of the following causes or events, he or she may file an application for the postponement of the investigation with the Mayor or the head of the relevant Gu: <Amended by Rule No. 4351, Jun. 4, 2020>
1. If the taxpayer has business hardship due to a fire or any other disaster;
2. If it is impracticable for the taxpayer to undergo the tax investigation because of illness or a long business trip of the taxpayer or his or her tax manager or any other cause or event;
3. If books of accounts or evidentiary documents are seized or held provisionally in custody by the relevant authority;
4. If any cause or event similar to those referred to in subparagraphs 1 through 3 arises.
(2) A person who wishes to have a tax investigation postponed under paragraph (1) shall file an application with the Mayor or the head of the relevant Gu, stating the following matters:
1. The name and address or abode of the person who wishes to have the tax investigation postponed;
2. The period during which the person wishes to have the tax investigation postponed;
3. The ground on which the person wishes to have the tax investigation postponed;
4. Other necessary matters.
(3) Deleted. <by Rule No. 4351, Jun. 4, 2020>
(4) Deleted. <by Rule No. 4351, Jun. 4, 2020>

Article 22 (Conduct of Tax Investigations) (1) An investigating official shall make efforts to conduct tax investigations after a reasonable determination of the place of investigation, the scope of the investigation of books, etc. to the minimum extent necessary to achieve the goals of the tax investigation.
(2) An investigating official shall, in the course of an investigation, question the investigation subject or a related party, or investigate the relevant books, in a prompt manner so as not to interfere with the business or economic activities of the investigation subject and/or related party.
(3) If necessary for the efficient conduct of a tax investigation and the reduction of the investigation period, an investigating official may accept submissions of copies of the account books, relevant documents, etc. for examination at the investigating agency with the advance consent of the investigation subject.



Article 23 (Period of Investigation) The Mayor or the head of a Gu shall determine the period for a tax investigation within the maximum of 20 days in consideration of tax items subject to investigation, the type and size of business, the level of difficulty of investigation, etc.: Provided, That the period for investigation shall be as short as possible to prevent disruption to the taxpayer's economic activities.
[This Article Wholly Amended by Rule No. 4351, Jun. 4, 2020]

Article 23 (Place of Investigation) A tax investigation shall be conducted at the investigation subject’s main office, principal place of business, address, investigating department, etc.: Provided, however, that if the investigation subject’s main office, main business, etc. are located outside the area with jurisdiction over the place for tax payment, the tax investigation may be conducted at an office, principal place of business, etc. within the area under jurisdiction.



Article 24 (Calculation of Period for Investigation) The period for an investigation begins on the date of commencement (counting from the date of submission of final data) and ends on the date of closing, and Saturdays, official holidays, etc. shall be included from the period for the investigation. <Amended by Rule No. 4351, Jun. 4, 2020>

Article 24 (Investigation Hours) An investigating official who directly investigates an investigation subject shall do so within the investigation subject’s business hours: Provided, however, that a tax investigation may be conducted outside the business hours at the request of the investigation subject or with the investigation subject’s consent.



Article 25 (Restriction on Extension of Period for Investigation) If any of the causes or events referred to in any of the subparagraphs of Article 84 (1) of the Act arises during a tax investigation, the Mayor or the head of the relevant Gu may extend the period for the tax investigation by not more than 20 days from the day on which the cause or event ceases to exist. In such cases, the period for suspension of the tax investigation shall not be included in the period for the tax investigation and the extended period, and an investigative officer may not question the relevant taxpayer regarding the tax investigation nor demand him or her to allow an inspection or investigation of books of account, etc. or to submit such books of account, etc. <Amended by Rule No. 4166, Jun. 1, 2017; Rule No. 4351, Jun. 4, 2020>

Article 25 (Compliance with the Scope of Investigation, Etc.) (1) An investigating official shall comply with the predetermined scope and limits with regard to the period subject to investigation, tax items subject to investigation, investigation period, etc. in the conduct of a tax investigation.
(2) Notwithstanding paragraph (1), if the investigating official confirms, in the course of a tax investigation under Article 80-2 (1) of the Act, that suspicious tax evasion activities exist for several taxable periods or concern other taxable items, the scope of the investigation may be expanded with the approval of the investigation chief.
(3) When expanding the scope of an investigation under paragraph (2), the reason for the expansion of the scope of the investigation, etc. shall be specifically entered in attached Form 3 and the investigation subject shall be notified thereof.



Article 26 (Prohibition of Search and Seizure) (1) When conducting a tax investigation, the residence, office, or any other place of a taxpayer shall not be searched, nor books of account, documents, etc. shall be seized or provisionally held in custody: Provided, That the foregoing shall not apply to any of the following cases: <Amended by Rule No. 4247, Oct. 18, 2018; Rule No. 4351, Jun. 4, 2020>
1. Where it is found that an offense is being committed;
2. Where evidence of an offense, such as confidential books of account, etc., is found.
(2) In cases under the proviso of paragraph (1), the investigative officer shall report the case to the investigation manager without delay and shall take measures to convert the investigation into an investigation of a local tax offense. <Amended by Rule No. 4351, Jun. 4, 2020>
(3) When a tax authority intends to seize or hold books of account, documents, etc. held in custody under the proviso of paragraph (1), it shall issue a notification of articles seized or held in custody in attached Form 1 and a list of articles seized or held in custody in attached Form 2. <Amended by Rule No. 4351, Jun. 4, 2020>

Article 26 (Confirmation of Financial Transactions, Etc.) (1) During or before the conduct of a tax investigation, an investigating official may confirm any of the following items of financial transaction information, etc. (hereinafter in this article referred to as “financial transaction information”), for the purpose of confirming suspicions of municipal tax evasion, etc.; In such a case, the scope and procedure prescribed in the governing laws shall be complied with.
1. Specified financial transaction information for the confirmation of municipal tax evasion under Article 10 (1) and (4) of the Act on the Reporting and Use of Specified Financial Transaction Information;
2. Information or data on the details of financial transactions for confirming clear evidence that would substantiate a suspicion of municipal tax evasion under Article 4 (1) 2 of the Act on Real Name Financial Transactions and Confidentiality.
(2) An investigating official who seeks to confirm the financial transaction information of an investigation subject or a related party (hereinafter in this paragraph referred to as an “investigation subject, etc.”) shall specify the scope and period, etc. of the investigation subject’s financial transaction that is subject to inquiry, and the bank account under inquiry, etc. in order to obtain the approval of the Mayor or the head of the relevant autonomous Gu. In such event, the period subject to inquiry shall be limited to the taxation period subject to investigation, but it may be extended to periods outside the taxation period subject to investigation if necessary in connection with the confirmation, etc. of suspected evasion within the taxation period subject to investigation.



Article 27 (Deposit of Books of Account and Documents) (1) If it is crucial to secure evidentiary documents about a suspected tax omission in conducting a special tax investigation, the relevant tax authority may deposit books of accounts, documents, etc. with the consent of a taxpayer. <Amended by Rule No. 4351, Jun. 4, 2020>
(2) When the tax authority intends to deposit books of account, documents, etc. under paragraph (1), the tax authority shall issue a notification of articles deposited in attached Form 3 and a list of articles deposited in attached Form 4. <Amended by Rule No. 4351, Jun. 4, 2020>
(3) Books of account, documents, etc. shall be deposited under paragraph (1) within the minimum extent necessary for the objectives of an investigation. <Newly Inserted by Rule No. 4351, Jun. 4, 2020>

Article 27 (Measures in Response to Violations of Orders, Etc.) (1) If an investigation subject destroys or conceals books or avoids or delays compliance with orders for perusal or submission thereof, the investigating official shall take appropriate measures, such as extending the period of the investigation, investigating the offense, or imposing administrative fines under Article 108 of the Act, or disposition of notification under Article 121 of the Act.
(2) An investigating official shall refuse any attempt at improper solicitation or the provision or arrangement of money, goods, or entertainment by anyone in relation to a tax investigation, and shall take necessary measures under the Improper Solicitation and Graft Act or Seoul Metropolitan Government’s Code of Conduct for Public Officials.




Article 28 (Countermeasures against Investigative Officers Abusing Investigative Power) If an investigative officer or an investigation manager abuses his or her investigative power as means of the convenience in investigation in contravention of due process and proper methods, the Mayor or the head of the relevant Gu shall take countermeasures necessary for preventing the recurrence of such abuse. <Amended by Rule No. 4351, Jun. 4, 2020>

CHAPTER VI CLOSURE OF TAX INVESTIGATION Article 28 (Closure of a Tax Investigation) (1) An investigating official seeking to close a tax investigation shall summarize the investigation findings and report them to the Mayor or the head of the relevant autonomous Gu.
(2) The Mayor or the head of an autonomous Gu, on receiving a report on the closure of a tax investigation, shall examine the details and decide whether to close the investigation.
(3) Under Article 85 of the Act, an investigating official shall notify the investigation subject of the result of the tax investigation.



Article 29 (Restriction on Exercise of Investigative Power and Right to Have Assistance from Specialists) (1) The investigative power over the taxpayer subject to an investigation and persons related to such taxpayer shall be exercised only to the extent necessary for the investigation. <Amended by Rule No. 4247, Oct. 18, 2018; Rule No. 4351, Jun. 4, 2020>
(2) When a taxpayer becomes subject to a tax investigation with regard to a local tax, the taxpayer may have an attorney-at-law, certified public accountant, or certified tax accountant be present at the investigation or express his or her opinion with regard thereto. <Amended by Rule No. 4351, Jun. 4, 2020>

Article 29 (Notification of Tax Information; Development and Dissemination of Investigation Methods) (1) In the event that tax information identified in the process of an investigation constitutes tax data concerning another local government or data concerning national taxes, the head of such local government or tax office shall be notified without delay.
(2) The Mayor shall manage cases of investigative methods and notify the heads of the relevant autonomous Gu thereof in order to develop and disseminate investigative methods.



CHAPTER IV MANAGEMENT OF INVESTIGATIONS Article 30 (Formulation of Investigation Plans) (1) The Mayor or the head of a Gu shall formulate an annual comprehensive investigation plan, upon workload, conditions of human resources, etc. <Amended by Rule No. 4351, Jun. 4, 2020>
(2) When the Mayor formulates an investigation plan under paragraph (1), he or she shall collect the opinions of the heads of Gus and take necessary measures so as to prevent double investigation of the same taxpayer. <Amended by Rule No. 4351, Jun. 4, 2020>

Article 30 (Management of Tax Investigation Lists and Data) (1) The heads of autonomous Gu shall prepare and manage the current state of corporations subject to tax investigations, history of investigations, business closures, etc.
(2) To prevent redundant tax investigations and ensure the efficient discharge of their duties, investigation officials shall enter the following information into the Seoul Metropolitan Government Comprehensive Tax System and manage the entries:
1. Investigation subject;
2. Tax investigation period, substance, amount of additionally collected tax, reason for additional collection, objections, etc.;
3. Other necessary work such as management of the ledger of investigation results by taxpayer, tax item, etc.
(3) To ensure the efficient management of tax investigation data, the Mayor shall maintain the Seoul Metropolitan Government Comprehensive Tax System in an optimized state.



Article 31 (Preparation for Investigations) (1) Before commencing a tax investigation, an investigative officer shall analyze and examine the following data available, define problems of the person subject to the investigation and main issues of the investigation, and set directions for the investigation, so as to conduct the investigation efficiently:
1. Details of voluntary tax payments;
2. Computer-processed data;
3. Data from administrative agencies;
4. Information and data collected from other sources.
(2) An investigative officer shall define problems found in the course of preparation for an investigation, prepare a report on preparation for investigation, and submit it to the investigation manager.
(3) An investigation manager shall set directions for an investigation in advance so as to ensure the efficient execution of the investigation and shall show the direction to the relevant investigative officers in detail.

CHAPTER VII SUPPLEMENTARY PROVISIONS Article 31 (Rules of Conduct for Investigating Officials, Etc.) (1) The Mayor shall issue one ID under Article 140 (2) of the Act to each investigating official, and shall immediately retrieve and destroy such identification in the event of any changes, such as the resignation or transfer of an investigating official.
(2) The Mayor may prepare regulations on investigations of official conduct to ensure the lawful and fair execution of tax investigations.



Article 32 (Conducting of Partial Tax Investigation) The Mayor or the head of a Gu may conduct a partial tax investigation taking into account convenience for taxpayers, the efficiency of an investigation, etc., in any of the following cases:
1. Where an investigation into specific tax items is necessary in consideration of the characteristics of tax items, types of tax returns filed by taxpayers, the scale of business, suspected tax evasions, etc.;
2. Where an urgent investigation into specific tax items is necessary to secure tax claims;
3. Where verification is necessary with regard to part of a transaction in the course of an investigation into the other party to the transaction;
4. Other cases where verification is necessary with regard to specific places of business, specific items, or specific transactions for the efficiency of a tax investigation, convenience for taxpayers, etc.
[This Article Newly Inserted by Rule No. 4351, Jun. 4, 2020]
[Previous Article 32 moved to Article 33 <by Rule No. 4351, Jun. 4, 2020>]

Article 33 (Direction of Investigations) (1) All tax investigations shall be conducted under the direction of an investigation manager.
(2) If an investigation manager is unable to direct investigations for a substantial period, a person acting on behalf of the investigation manager shall become the acting investigation manager.
[Moved from Article 32; previous Article 33 moved to Article 34 <by Rule No. 4351, Jun. 4, 2020>]

Article 34 (Commencement of Investigations) (1) When an investigative officer commences a tax investigation, he or she shall present a certificate verifying his or her status to a taxpayer or an interested person, issue the Charter of Taxpayers' Rights to such taxpayer or interested person, read the essentials thereof in person to him or her, and explain the reasons for and the period of the investigation, details of and procedures for the affairs of a taxpayers’ advocate regarding the protection of rights and interests of taxpayers under Article 77 (2) of the Act, procedures for relief for breached rights, etc.
(2) Where an investigative officer conducts a tax investigation in writing, he or she shall give written notice to a taxpayer or an interested person of the essentials of the Charter of Taxpayers’ Rights to be read and the matters to be explained under paragraph (1).
[This Article Wholly Amended by Rule No. 4351, Jun. 4, 2020]
[Moved from Article 32; previous Article 33 moved to Article 34 <by Rule No. 4351, Jun. 4, 2020>]

Article 35 (Reporting on Investigations) An investigative officer shall report matters investigated to the investigation manager.
[This Article Wholly Amended by Rule No. 4351, Jun. 4, 2020]
[Moved from Article 34; previous Article 35 moved to Article 36 <by Rule No. 4351, Jun. 4, 2020>]

Article 36 (Management of Investigation Process) (1) An investigative officer shall investigate problems encountered while preparing for an investigation and matters instructed by the investigation manager thoroughly and report the details of the investigation in writing.
(2) Upon receipt of a report on a tax investigation, the investigation manager shall instruct the direction of investigation with regard to the matters to be investigated afterwards and new problems so as not to omit any investigation of persons selected to be subject to investigation.
(3) Where a person selected to be investigated refuses or evades submission of data, such as documents for a documentary tax investigation, he or she shall pay an administrative fine prescribed in Article 108 (1) of the Act.
(4) An investigative officer shall secure specific evidentiary documents for all facts found through a tax investigation, so as to prevent any potential dispute. <Newly Inserted by Rule No. 4351, Jun. 4, 2020>
[This Article Wholly Amended by Rule No. 4351, Jun. 4, 2020]
[Moved from Article 35; previous Article 36 deleted <by Rule No. 4351, Jun. 4, 2020>]

Article 37 (Termination of Investigations) (1) Where an investigative officer intends to terminate a tax investigation, he or she shall compile the details of the investigation and report the results to the investigation manager.
(2) Upon receipt of a report on the termination of an investigation under paragraph (1), the investigation manager shall examine the details of such report and determine whether to terminate the investigation.
(3) An investigative officer shall give a specific explanation of the results of an investigation to a taxpayer or his or her tax agent, and shall inform in detail him or her of the methods for relief for breached rights where any objection is filed to such results.
[This Article Newly Inserted by Rule No. 4351, Jun. 4, 2020]
[Moved from Article 38 <by Rule No. 4351, Jun. 4, 2020>]

Article 38 (Notice of Results of Tax Investigation) (1) When an investigative officer confirms the results of an tax investigation, he or she shall give written notice of the following matters to a taxpayer within seven days from the day on which such results are confirmed: <Newly Inserted by Rule No. 4351, Jun. 4, 2020>
1. The period for the tax investigation and tax items;
2. Where a tax base or the amount of a tax is determined or corrected, the reasons for such determination or correction and the grounds for calculation;
3. The fact that a revised tax base return may be filed under Article 49 of the Act;
4. The fact that a pre-assessment review may be requested under Article 88 (1) of the Act.
(2) Notwithstanding paragraph (1), notice of the results of a tax investigation may be omitted in any of the following cases: <Amended by Rule No. 4166, Jun. 1, 2017; Rule No. 4247, Oct. 18, 2018; Rule No. 4351, Jun. 4, 2020>
1. Where a cause or event referred to in Article 22 (1) of the Local Tax Collection Act arises to justify collection before the deadline for tax payment;
2. Where the period from the date it is intended to give notice of the results of an investigation, to the end of the period of exclusion from levying or the date the power to collect relevant taxes is extinguished by prescription is not more than three months;
3. Where it is impossible to give notice because a taxpayer’s whereabouts are unknown or the relevant business is permanently closed;
4. Where the taxpayer does not have any tax agent, nor have a domicile or place of business in the Republic of Korea.
5. Where an investigation is terminated following a decision of a reinvestigation made under the provisos of Articles 88 (5) 2 and 96 (1) 3 of the Act;
6. Where receipt of a written notice of the results of a tax investigation is refused or evaded.
[Moved from Article 37; previous Article 38 deleted <by Rule No. 4351, Jun. 4, 2020>]

Article 39 (Notice of Tax Information and Development and Dissemination of Investigative Methods) (1) Various tax information acquired in the course of investigations shall be recorded in the tax data processing register, and notice of tax data related to another local government or data related to national taxes shall be given to the head of the local government or the head of the relevant tax office without delay.
(2) An investigative officer shall report to the Mayor and the Minister of the Interior and Safety to correct the problems in statutes or regulations, and systems, which are identified in the course of an investigation. <Amended by Rule No. 4198, Jan. 18, 2018>
(3) In order to develop and disseminate investigative techniques, the Mayor shall manage exemplary investigative techniques and notify the head of each Gu of such techniques.

Article 40 (Management of Tax Investigation List and Data) (1) The Mayor or the head of a Gu shall prepare and manage a list stating the current status of corporations subject to tax investigations, history of investigation into such corporations, permanent closure of their business, etc. <Newly Inserted by Rule No. 4351, Jun. 4, 2020>
(2) In order to prevent double tax investigation and improve efficiency in service, each investigative officer shall enter and manage the following information in the integrated tax system: <Amended by Rule No. 4351, Jun. 4, 2020>
1. Persons subject to a tax investigation;
2. The period and details of a tax investigation, the additionally levied tax amount, the ground for additional levying, evidentiary documents, the detail of objection;
3. The management of registers of results of a tax investigation for each taxpayer and for each tax item and other necessary work.
(3) In order to ensure efficient management of tax investigation data, the Mayor shall maintain the integrated tax system optimally. <Amended by Rule No. 4351, Jun. 4, 2020>

CHAPTER V SUPPLEMENTARY PROVISIONS Article 41 (Code of Conduct of Investigative Officers) (1) The Mayor shall issue a certificate carried by an investigative officer under Article 140 (2) of the Act to each investigative officer and shall recover and destroy such certificate if the officer retires from office or is transferred to other places or there is any other change to his or her status. <Amended by Rule No. 4351, Jun. 4, 2020>
(2) Every investigative officer shall have thorough knowledge of a Code of Conduct of Investigative Officers and shall fully observe it.
(3) Deleted. <by Rule No. 4351, Jun. 4, 2020>

Addenda <No. 4684, Jan. 20, 2025>
Article 1 (Enforcement Date) These Rules shall enter into force on the date of their promulgation.
Article 2 (Applicability of Tax Investigation Reprieve) The amended provisions in Article 10 (1) 3 to 5 shall be applied only once, starting with cases confirmed, selected, and certified after the enforcement of these Rules: Provided, however, that they shall apply, starting in the following year, to enterprises selected as investigation subjects before such confirmation, selection, and certification.

Notification of Seizure/Custody

List of Articles Seized/Held in Custody

Notification of Custody

List of Articles Deposited