|
|
|
|
|
Newsletter | April 2017, Issue 1
|
|
|
|
|
|
|
TAX
|
|
|
|
Lawmakers Pass Tax Law Changes for 2017
|
|
|
|
In December of 2016, the Korean National Assembly passed amendments to the tax laws. Following procedures for public notification and rulemaking, the amendments to the corresponding Presidential Decrees were also approved, and were promulgated in February 2017.
|
|
|
|
Key Amendments:
|
|
|
|
Although most amendments to the Presidential Decrees are supplementary to the amendment of tax laws, we highlight below significant amendments that may affect your business or that may be of interest to you.
|
|
|
|
|
| 1. |
Mileage tax clarified
|
|
|
 |
Before the amendment, if a business operator provided mileage, points, or gift certificates (collectively, “mileage”) to customers upon the purchase of goods or services, customers could use “mileage” to purchase goods or services. When these business operators provided goods or services in return for “mileage,” the price of the goods or services provided was included in the VAT base.
|
|
|
|
|
|
After the amendment, the price of goods or services provided in return for “mileage” can be excluded from the VAT base to the extent classified as “supplier granted” mileage. If the mileage is not such a supplier granted mileage, it will continue to be included in the VAT base. For this purpose, “supplier granted” mileage refers to mileage, which is provided by a business operator to its customer at the time of the sale of its goods or services to the customer, and is subsequently used by the customer to purchase goods or services from the same business operator (not its related parties).
|
|
|
|
|
|
Effective date: This amendment applies to goods or services supplied on or after April 1, 2017.
|
|
|
|
|
|
|
|
|
|
| 2. |
Case criteria for the Tax Tribunal’s en banc session expanded
|
|
|
|
Before the amendment, when a taxpayer appealed a case to the Tax Tribunal, one chief judge and at least two judges were assigned to the case. Cases at the Tax Tribunal are heard by at least three judges. In certain situations, Tax Tribunal cases may be reviewed en banc.
|
|
|
|
|
|
After the amendment, the Commissioner of the National Tax Service (“NTS”) may request an en banc session, and the head of the Tax Tribunal may allow it. As such, the Commissioner of the NTS may influence the Tax Tribunal’s decisions.
|
|
|
|
|
|
Under the new amendment, en banc sessions are also allowed in the following cases:
|
|
|
|
|
|
|
|
| 1) |
When the Commissioner of the NTS requests an en banc session, because the case may have a significant impact on the tax administration.
|
| 2) |
When the result is expected to significantly impact taxpayers’ rights or duties.
|
|
|
|
|
|
|
|
Effective date: The amendment will apply to appeals filed on or after the effective date of the relevant presidential decree (February 7, 2017).
|
|
|
|
|
|
|
|
|
Back to Main Page
|
|
|
|
|
|
If you have any questions regarding this article, please contact below:
|
|
|
|
|
|
|
|
For more information, please visit our website:
|
|
|
|
|
|
|
|