SEOUL METROPOLITAN GOVERNMENT OPERATING RULE ON TAX INVESTIGATIONS
- Enactment No. 2687, May. 01, 1995
- Partial Amendment No. 3173, Mar. 20, 2001
- Amendment of Other Laws No. 3617, Apr. 17, 2008
- Partial Amendment No. 3781, Dec. 30, 2010
- Partial Amendment No. 3804, Jun. 23, 2011
- Whole Amendment No. 4081, Apr. 07, 2016
- Amendment of Other Laws No. 4143, Feb. 23, 2017
- Amendment of Other Laws No. 4166, Jun. 01, 2017
- Amendment of Other Laws No. 4198, Jan. 18, 2018
- Partial Amendment No. 4247, Oct. 18, 2018
- Partial Amendment No. 4351, Jun. 04, 2020
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 136 of the Framework Act on Local Taxes.
Article 2 (Definitions)
The terms used in this Rule shall be defined as follows:
Article 3 (Basic Principles of Tax Investigation)
Every tax investigation shall be carried out in good faith in accordance with the following principles:
Article 4 (Duty of Confidentiality)
No investigative officer (including his/her senior managers) shall disclose any fact that becomes aware of in the course of a tax investigation but is not disclosed to the general public or any information that may, if disclosed, adversely affect the State, a local government, or the relevant taxpayer, not only while in service but also after retiring from office.
Article 5 (Jurisdiction over Tax Investigation)
(1) Administrative work related to 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 5 (1) of the Seoul Metropolitan Government Framework Ordinance on Taxes: Provided, That the Mayor him/herself may perform such administrative work, if necessary.
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/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.
Article 7 (Relationship to Other Regulations, etc.)
This Rule shall take precedence over other regulations, service guidelines, etc. regarding tax investigations.
CHAPTER II SELECTION OF PERSONS SUBJECT TO INVESTIGATION
Article 8 (Selection of Persons Subject to Investigation)
The persons to be subject to general investigation and persons to be subject to special 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.
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 10 (Respect for Compliant Tax Returns Filed by Taxpayers)
The Mayor and the head of a Gu shall select persons tobe 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.
Article 11 (Persons Subject to General 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 investigation and shall select the persons to be subject to the direct investigation under paragraphs (2) and (3) 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 Team for the Selection of Persons subject to Tax Investigation.
Article 12 (Organization of Team for Selection of Persons Subject to Tax Investigation)
(1) The Mayor or the head of a Gu shall organize the Team for the Selection of Persons subject to Tax Investigation in order to select persons to be subject to tax investigation on a regular basis under Article 11 (1).
Article 13 (Persons Subject to Special Inspection)
(1) In any of the following cases, a person may be selected to be subject to a special inspection:
Article 14 (Exemption of Micro or Compliant Enterprises, etc. from Tax Investigation)
(1) If any of the following persons has no delinquent local tax as at the date of selection eligibility for exemption, the person shall be exempted from tax investigations for three years:
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 the following cases:
Article 16 (Observance of Scope of Investigation, etc.)
When an investigative officer intends to conduct a tax investigation, he/she shall pre-determine the scope, period, and method of the investigation and observe such matters.
Article 17 (Restriction on Expansion of Scope of Investigation)
Except in the following cases, no investigative officer shall expand the scope of investigation in the course thereof:
Article 18 (Methods of Investigation)
Investigations may be conducted by the following methods, based upon the scale of business of the person subject to investigation, the type of business, outcomes of the analysis of taxation data, suspected tax omissions, information about tax evasions, etc.:
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 taxpayer: Provided, That, if a place of investigation is not available because a building is under construction or on nay other ground, a tax investigation may be conducted in either of the following places:
Article 20 (Restriction on Investigation Time)
A tax investigation on a taxpayer shall be conducted face to face, during the taxpayer's business hours: Provided, That a tax investigation may be conducted before or after business hours, upon the taxpayer's request or with the taxpayer's consent, after obtaining approval thereof from the investigation manager.
Article 21 (Prior Notice of Tax Investigation, etc.)
When it is intended to conduct a tax investigation, written notice of the matters specified in Article 92 (1) of the Enforcement Decree of the Framework Act on Local Taxes shall be given to the taxpayer to be investigated, by not later than ten days before the commencement of the investigation: Provided, That the foregoing shall not apply where it is found impracticable to attain the objectives of the tax investigation, if prior notice is given, because of the risk of destruction of evidence, etc.
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 to undergo the investigation due to a natural disaster or any of the following causes or events, he/she may file an application for the postponement of the investigation with the Mayor or the head of the relevant Gu:
Article 23 (Period of Investigation)
The Mayor or the head of a Gu shall pre-determine the period for an investigation within the maximum of 20 days for each person subject to investigation, and the period for investigation shall be as short as possible to prevent disruption to the taxpayer's economic activities.
Article 24 (Calculation of Period for Investigation)
The period for an investigation begins on the date of commencement and ends on the date of closing, but Saturdays, official holidays, the Workers' Day under the Designation of Workers' Day Act, etc. shall be excluded from the period for the investigation.
Article 25 (Restriction on Extension of Period for Investigation)
If any of the causes or events referred to in Article 112 (1) of the Framework Act on Local Taxes 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.
Article 26 (Prohibition of Search, Seizure, etc.)
(1) While 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, unless the investigation is conducted with regard to a tax offense: Provided, That the foregoing shall not apply to any the following cases:
Article 27 (Deposit of Books of Account, Documents, etc.)
(1) If it is crucial to secure evidentiary documents about a suspected tax omission in conducting a special investigation, the relevant tax authority may deposit such documents.
Article 28 (Countermeasures against Investigative Officers Abusing Investigative Power, etc.)
If an investigative officer or an investigation manager abuses his/her investigative power in any manner 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.
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.
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. and examine the period, scope, methods, and places of investigation, the preliminary notice of the commencement of investigation, etc. to formulate an investigation plan for each person subject to investigation.
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:
Article 32 (Direction of Investigations)
(1) All tax investigations shall be conducted under the direction of an investigation manager.
Article 33 (Commencement of Investigations, etc.)
(1) When an investigative officer commences a tax investigation, he/she shall issue a document containing the Charter of Local Taxpayers' Rights to the relevant taxpayer.
Article 34 (Reporting on Investigations)
(1) An investigative officer shall submit a daily report on matters investigated every day to the investigation manager: Provided, That, if it is impracticable to submit such a report due to remoteness of the place of investigation or other circumstances in the investigation, he/she may make a report either directly or via telephone, and then submit a written report as instructed by the investigation manager.
Article 35 (Management of Investigation Process)
(1) Upon receipt of an investigation report, the investigation manager shall instruct the direction of investigation in detail, with regard to the matters to be investigated afterwards and new problems.
Article 36 (Organization and Operation of Advisory Team on Tax Issues)
(1) In order to ensure the appropriateness of tax investigations and prevent improper taxation, the Mayor or the head of a Gu may operate an advisory team on tax issues.
Article 37 (Notice of Results of Tax Investigation)
(1) Upon completion of a tax investigation, the investigative officer shall give written notice of the results of the investigation to the taxpayer within seven days from the day on which the results of the investigation are confirmed: Provided, That it does not need to give notice of the results of a tax investigation in any of the following cases:
Article 38 (Recommendation of Taxpayers of Merit)
If an investigative officer finds, as a result of a tax investigation, that a taxpayer meets all the following criteria, he/she may recommend the taxpayer as a taxpayer of merit under the Seoul Metropolitan Government Ordinance on the Support of Exemplary Taxpayers, etc.:
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 promptly.
Article 40 (Management of Tax Investigation Data)
(1) 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:
CHAPTER V SUPPLEMENTARY PROVISIONS
Article 41 (Code of Conduct, etc. of Investigative Officers)
(1) The Mayor or the head of a Gu shall issue an identification card of a tax officer to each investigative officer in accordance with Article 62 of the Enforcement Rule of the Framework Act on Local Taxes and shall recover and destroy the identification card if the officer retires from office or there is any other change to his/her status.
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