Tax Audit Assistance

Our Tax Audit Practice assists clients in all phases of tax audits (including preparation and defense) of all forms (including regular tax audits, special investigations, search and seizure audits, inheritance and gift tax audits and individual tax audits).  The scope of our service also encompasses pre-audit diagnosis of key issues (mock tax audits or tax health checks) and post-audit issue rectification.  Our practice consists of a balanced mix of former tax auditors of the National Tax Service, accountants and attorneys, with extensive field audit experience. 

Tax Dispute Resolution

The Tax Dispute Resolution Practice is composed of attorneys (including former Supreme Court justices and High Court or District Court judges), former Tax Tribunal officials, and other experienced tax professionals.  We assist clients in tax appeals at all levels — from the National Tax Service administrative appeal procedures (pre-assessment and post-assessment appeals) and the Tax Tribunal and other judicial courts.  Each team takes into account the client needs and is customized to address the specific issues and demands of each case using an optimal mix of former judges, tax attorneys and other professionals familiar with the specific issues and individuals involved in the case.

On average, Kim & Chang assists clients in over 100 tax audits and 300 tax disputes annually.  Recent cases include:

Tax Litigation

• Favorable judgment cancelling corporate and local tax assessments based on denial of “qualified corporate division” treatment

• Favorable judgment involving complex issues associated with post-merger assumption of bad debt provision

• Favorable judgment cancelling tax assessment based on denial of interest deduction on subordinated loan  

• Favorable judgment involving the treatment of discount coupons under the VAT law

• Favorable judgment involving the concepts of “beneficial ownership” and substance-over-form approach in the context of the UK-Korea tax treaty for a UK holding company established by a French parent

• Favorable judgment upholding application of the Korea-Hungary tax treaty withholding rate on royalties paid by a Korean company to a Hungarian company, a subsidiary of the US parent company 

• Favorable judgment relating to a potential deemed donation involving shares held in a trust

• Favorable judgment confirming a taxpayer’s right to tax incentives obtained in a tax-qualified spin-off

• Favorable judgment allowing a construction company’s deduction of bad debt expenses in connection with the assumption of developer liabilities

• Favorable judgment involving the treatment of additional paid-in capital in excess of par in a debt-to-equity swap 

• Favorable judgment limiting the application of the denial of unfair transaction rules under Article 52 of the Corporate Tax Law 

• Favorable judgment cancelling corporate tax assessment based on denial of cost deduction under the rules against disproportionately large dealings between related parties

• Favorable judgment involving an asset re-valuation by an insurer

• Favorable judgment regarding beneficial ownership in the context of a Luxembourg SICAV fund qualifying for benefits under the Korea-Luxembourg Tax Treaty

• Favorable inheritance and gift tax judgment involving the disposal of assets held by a decedent’s overseas holding company

Administrative Tax Appeals (Tax Adjudication & Review of Adequacy of Tax Imposition (“RATI”))

• Favorable Tax Tribunal judgment involving sales incentives and overseas advertising expenses

• Favorable Tax Tribunal judgment on “share-ownership” requirements to qualify for reduced dividend withholding rates under the Korea-US Tax Treaty

• Favorable Tax Tribunal judgment regarding substance-over-form rules in the context of offshore funds

• Favorable Tax Tribunal decision allowing deduction of legal costs and compensatory damage payments in an overseas collusion case

• Favorable Tax Tribunal judgment regarding the amortization of goodwill acquired in a merger

• Favorable Tax Tribunal judgment involving inheritance and gift tax issues associated with the period of previously operated family business

• Favorable Tax Tribunal judgment regarding the treatment of retired treasury stock

• Favorable RATI decision involving the allocation of common expenses and associated VAT invoice issuance issues

• Favorable RATI decision involving losses carried over in a reverse merger