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VAT & Indirect Tax

Overview

Our VAT & Indirect Tax Practice provides various services with respect to VAT return filings, zero-rated/VAT exemptions, issuance/receipt of tax invoices, tax rulings on legal interpretations of VAT related laws, tax appeals and litigation (including appeals brought before the Tax Tribunal or the Korean courts), and criminal defense (e.g., fraudulent issuance of tax invoice).

In addition, our VAT & Indirect Tax Practice also covers indirect taxes, including individual consumption tax, liquor tax, stamp tax and education tax, and regularly provides consultations and representations. 

Based on our comprehensive understanding and experience accumulated by representing some of the most complex transactions and litigations in the country, we have the ability to build the most innovative and creative strategies around the most complex issues in the industry. Also, because of our regular exposure to cross-border transactions our Practice has developed some of the most experienced VAT/indirect tax professionals in Korea.

Key Servicesshow

General VAT advisory service

We advise and provide solutions regarding general VAT issues, including zero-rate VAT, VAT exemptions, VAT compliance and VAT credit (i.e., input tax credit).

 

Erroneous issuance/receipt of tax invoice (civil/criminal cases)

As erroneous issuance of tax invoices may provide a basis for finding criminal liability, we not only provide advice on erroneous issuance of tax invoices but also how such error can be defended from potential criminal liability or other accusations.

 

Obtaining tax rulings and other authoritative guidance on legal construction/interpretations

We support our clients to ensure minimum risks in executing new types of transaction by seeking and obtaining official rulings or other authoritative interpretations where the application of the law is unclear. 

 

Tax appeals (e.g., administrative appeals, Tax Tribunal, court litigation)

We provide comprehensive services with respect to our client’s tax appeals, ranging from refund requests and administrative appeals (i.e., Tax Tribunal) to litigation at all three levels of Korean courts. 

 

Indirect tax services 

As was the case for VAT, we also provide the above-mentioned consulting/representation with respect to a wide variety of issues in the realm of indirect taxes (e.g., individual consumption tax, liquor tax, stamp tax and consumption tax).

Key Experiencesshow

Our clients include various local/foreign TMT (technology, media and telecommunications) companies, IT companies, distributors, construction companies and real estate development companies. 

 

General Consulting
  • Advised several major foreign invested automobile companies with respect to tax invoices issued to their dealers.  
  • Successfully represented a number of foreign invested IT companies, manufacturing companies and pharmaceutical companies during their tax audits.
  • Successfully carried out VAT refund claims for domestic companies that provide mileage points to its customers. 

 

Criminal Cases   
  • Represented a Korean scrap metal distributor in a VAT criminal case (court found that the taxpayer was not guilty).
  • Represented a Korean energy company in a VAT criminal case concerning collusion (court found that the taxpayer was not guilty).
  • Defended a tax audit with respect to VAT issues for a parts manufacturing company that supplied goods to a foreign invested IT company (and successfully prevented the matter from developing into a criminal case).
  • Defended a criminal case concerning tax invoice forgery by a specialized logistics and distribution company in Korea.

 

Rulings and Legal Interpretations
  • Obtained favorable ruling for a Korean IT venture company regarding the proper method of issuing tax invoice through its mobile application.
  • Obtained favorable ruling regarding government subsidies afforded to private businesses.
  • Obtained recent ruling regarding the VAT treatment for foreign invested companies’ provision of electronic services.
  • Obtained favorable ruling regarding VAT issues for a mobile service provider.

 

Tax Appeal
  • Represented an affiliate of a Korean conglomerate company with respect to its dispute regarding whether mileage points should be treated as sales allowance under the VAT Law (Supreme Court held in favor of taxpayer).
  • Represented a Korean financial institution in a case concerning whether VAT should be exempt on payments made in consideration for debt collection services (Supreme Court held in favor of taxpayer).
  • Represented a Korean chemical company (an affiliate of a Korean conglomerate company) with respect to whether a business transfer constituted a comprehensive business transfer that is exempt from VAT (Supreme Court held in favor of taxpayer).
  • Represented a foreign financial data provider with respect to its dispute regarding Korean PE and VAT (Supreme Court held in favor of taxpayer). 
  • Represented a casino company with respect to its dispute arising from VAT assessments made against its domestic business place (Supreme Court held in favor of taxpayer).

 

Other Indirect Taxes
  • Represented a Korean tobacco company with respect to individual consumption tax imposed on its tobacco sold (held in favor of taxpayer).
  • Defended a Korean energy company in a case concerning individual consumption tax.
  • Advised a Korean IT company on the amended stamp tax laws.

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