PROCEDURE FOR THE PUNISHMENT OF TAX OFFENSES ACT

Article 1(Purpose) #

The purpose of this Act is to provide for matters concerning the investigation and disposition of tax offenses, in order to fairly and efficiently handle such offenses.

Article 2(Definitions) #

The terms used in this Act shall be defined as follows: <Amended on Dec. 31, 2018>

1. The term "tax offense" means any violation falling under the crimes in Articles 3 through 16 of the Punishment of Tax Evaders Act;

2. The term "tax offense case" means any case suspected of tax offense;

3. The term "investigation of tax offense" means investigative activities conducted by tax officials on a tax offense case in order to determine tax offenses, etc.;

4. The term "tax official" means any public official who engages in tax affairs and is designated in accordance with the following classification:

(a) In cases of public officials belonging to a regional tax office: Public officials designated by the chief public prosecutor of the district public prosecutors' office having jurisdiction over the place of the relevant regional tax office, on the recommendation of the director of the competent regional tax office;

(b) In cases of public officials belonging to a district tax office: Public officials designated by the chief public prosecutor of the district public prosecutors' office having jurisdiction over the place of the relevant district tax office, on the recommendation of the director of the competent regional tax office.

Article 3(Jurisdiction over Tax Offense Cases) #

(1) With regard to any tax offense case, the head of the tax office having jurisdiction over the place for tax payment of the relevant tax offense case shall have the jurisdiction over such tax offense case: Provided, That the director of a regional tax office may have the said jurisdiction for the important cases determined by Presidential Decree.

(2) Matters necessary for jurisdiction over tax offense cases other than those provided for in paragraph (1) shall be determined by the Commissioner of the National Tax Service.

Article 4(Transfer of Tax Offense Cases) #

Any evidence, etc. concerning a tax offense case obtained by an administrative agency, other than a regional tax office or district tax office, and by public officials belonging thereto shall be transferred without delay to the Commissioner of the National Tax Service, the director of the competent regional tax office, or the head of the competent district tax office.

Article 5(Tax Offense Investigation and Deliberation Committees) #

(1) In order to deliberate on the following matters concerning tax offense cases, a tax offense investigation and deliberation committee (hereinafter referred to as "committee") shall be established within a regional tax office: <Amended on Jan. 17, 2023>

1. Investigation of tax offenses with regard to any tax offense case falling under Article 3 of the Punishment of Tax Evaders Act;

1-2. If the tax offense investigation is to be closed without the disposition of tax offense under Article 13, matters related to such closure;

2. Determination of a disposition of tax offense pursuant to Article 14 (1);

3. Extension of the period for tax offense investigation and expansion of the scope of investigation;

4. Application of joint penal provisions pursuant to Article 18 of the Punishment of Tax Evaders Act;

5. Other matters deemed necessary by the chairperson in relation to the tax offense investigation.

(2) A committee shall be comprised of not more than 20 members, including one chairperson. <Amended on Mar. 29, 2016>

(3) Matters necessary for the composition, operation, etc. of a committee, other than those provided for in paragraph (2), shall be determined by Presidential Decree.

(4) A committee member who is not a public official shall be deemed to be a public official in applying penalty provisions under the Criminal Act or other Acts. <Newly Inserted on Mar. 29, 2016>

Article 6(Requests for Cooperation by State Agencies) #

(1) The Commissioner of the National Tax Service, the director of a regional tax office, or the head of a district tax office may request other State agencies to provide cooperation, where necessary to investigate tax offenses.

(2) A State agency in receipt of a request for cooperation under paragraph (1) shall comply with such request, unless any extenuating circumstance exists.

Article 7(Selecting Subjects of Investigation of Tax Offenses) #

(1) In any of the following cases, the director of a regional tax office or the head of a district tax office shall conduct investigation of tax offenses:

1. Where necessary to collect evidence, etc. to punish a person who is under suspicion of tax offenses (hereinafter referred to as "tax offense suspect");

2. Where the annual amount suspected of tax evasion, etc. exceeds the amount determined by presidential Decree.

(2) Where the director of a regional tax office or the head of a district tax office intends to conduct investigation of tax offenses with regard to any tax offense case falling under Article 3 of the Punishment of Tax Evaders Act, he/she shall undergo deliberation by a committee: Provided, That in cases falling under any of the subparagraphs of Article 9 (1), deliberation by a committee may be omitted, if the director of the regional tax office obtains approval from the Commissioner of the National Tax Service and the head of the district tax office obtains approval from the director of the competent regional tax office, respectively.

Article 8(Interrogation, Search, and Seizure of Tax Offense Suspects, etc.) #

Where necessary for a tax official to investigate tax offenses, he/she may interrogate, seize or search tax offense suspects, testifiers or witnesses thereto. In such cases, when conducting search or seizure, the tax official shall have the person as determined by Presidential Decree participate therein.

Article 9(Search and Seizure Warrant) #

(1) Where a tax official is to conduct search or seizure pursuant to Article 8, he/she shall apply for the issuance of a warrant to a prosecutor having jurisdiction over the location of employment of the tax official and, through the prosecutor's application for warrant, shall procure a warrant from a judge of the competent district court: Provided, That in cases falling under any of the following subparagraphs, seizure or search may be made without a warrant by showing a cause to the relevant tax offense suspect and other persons determined by Presidential Decree: <Amended on Jan. 17, 2023>

1. Where a tax offense is in progress;

2. Where a suspect of tax offense that is punishable by a long-term sentence of three years or more is likely to flee or destroy evidence and there is no time to procure a search or seizure warrant.

(2) Where a tax official conducts search or seizure without a warrant under the proviso of paragraph (1), he/she shall request a warrant for search or seizure from a judge of the competent district court within 48 hours from the time of the said search or seizure.

(3) Where a tax official fails to obtain a search or seizure warrant, he/she shall immediately return the seized articles to the person from whom such articles have been seized.

(4) Where it is impracticable to transport or keep any seized article, a tax official may have the seized article kept by its owner or possessor, or by the relevant public office (hereinafter referred to as "owner, etc."). In such cases, the tax official shall receive a certificate of custody from the owner, etc. and shall explicitly indicate, using seals or other methods, that the relevant article is a seized one.

Article 10(Application Mutatis Mutandis of the Criminal Procedure Act) #

Except matters provided for in this Act, with respect to search or seizure and the warrants thereof, the provisions concerning search or seizure and the warrants thereof in the Criminal Procedure Act shall apply mutatis mutandis.

Article 11(Preparation of Interrogation Reports, etc.) #

When a tax official has interrogated a person or conducted search or seizure, he/she shall record the circumstances surrounding such action in the report thereof, have the person interrogated or the participant under the latter part of Article 8 confirm such report, and shall sign and affix a seal thereto jointly with them. In such cases, when the person interrogated or the said participant fails or is unable to sign and affix a seal, the reason therefor shall be recorded in the report.

Article 12(Reporting) #

When a tax official has completed an investigation of a tax offense, he/she shall file a report thereof with the Commissioner of the National Tax Service, the director of a regional tax office, or the head of a district tax office.

Article 13(Types of Disposition of Tax Offenses) #

The types of disposition concerning tax offense cases shall be as follows:

1. Disposition of notification;

2. Accusation;

3. Freedom from suspicion.

Article 14(Deliberation by Committees concerning Disposition of Tax Offenses) #

(1) Where the director of a regional tax office or the head of a district tax office intends to take an administrative disposition of tax offense against any tax offense cases of which an investigation of tax offense is completed after deliberation by a committee or after obtaining approval from the Commissioner of the National Tax Service or the director of the competent regional tax office pursuant to Article 7 (2), he/she shall undergo deliberation by a committee: Provided, That in cases under Article 9 (1) 2, deliberation by a committee may be omitted, if the director of the regional tax office obtains approval from the Commissioner of the National Tax Service and the head of the district tax office obtains approval from the director of the competent regional tax office, respectively.

(2) When the Commissioner of the National Tax Service or the director of a regional tax office requests deliberation by a committee pursuant to paragraph (1), he/she shall immediately notify thereof to the persons subject to the disposition under the subparagraphs of Article 13.

(3) A person notified pursuant to paragraph (2) may submit his/her opinion to a committee, as prescribed by Presidential Decree.

Article 15(Disposition of Notification) #

(1) When the director of a regional tax office or the head of a district tax office secures positive evidence of tax offense, he/she shall make a notification with detailed disclosure thereof to the persons subject to the disposition, as prescribed by Presidential Decree, that the persons pay the amount of money or articles corresponding to the following subparagraphs: Provided, That in regard to articles to be confiscated or forfeited, he/she may make a notification thereof to urge the relevant persons to express their intention to pay for the articles concerned (hereinafter referred to as "application for payment"):

1. An amount equivalent to a fine (hereinafter referred to as "amount equivalent to a fine");

2. The articles equivalent to confiscation or forfeiture;

3. An amount equivalent to a surcharge.

(2) Where a person notified pursuant to the proviso of paragraph (1) makes an application for payment in accordance with the said notification and continues possession of the articles subject to confiscation or forfeiture, the person shall keep such articles until a public auction or any other necessary disposition is made.

(3) When a person notified pursuant to paragraph (1) complies with the notification, he/she shall not be subject to any investigation of tax offense in regard to the same case or to any punishment.

(4) Criteria for imposition of an amount equivalent to a fine pursuant to paragraph (1) shall be determined by Presidential Decree.

(5) The amount equivalent to a fine under pragraph (1) shall be paid in the manner prescribed in the subparagraphs of Article 12 (1) of the National Tax Collection Act. <Newly Inserted on Jan. 17, 2023>

Article 16(Suspension of Prescription for Prosecution) #

In the event of a disposition of notification under Article 15 (1), the prescription for prosecution shall be suspended for the period from the date of the notification to the date of the accusation. <Amended on Jan. 17, 2023>

[Title Amended on Jan. 17, 2023]

Article 17(Accusation) #

(1) In any of the following cases, the director of a regional tax office or the head of a district tax office shall immediately accuse the relevant person without notification:

1. Where the person is acknowledged to be punishable by imprisonment in consideration of the related extenuating circumstances;

2. Where the person is acknowledged to be lacking financial resources or ability to pay in accordance with the notification under Article 15 (1);

3. Where no notification can be made because the person's residence is unclear or because the person refuses to receive documents;

4. Where the person is likely to flee or destroy evidence.

(2) Where the person notified pursuant to Article 15 (1) fails to comply with the notification within 15 days from the date when the person receives the notification, the director of a regional tax office or the head of a district tax office shall accuse the person: Provided, That this shall not apply where the person complies with the notification before he/she is accused, even after passage of the said 15 days.

Article 18(Transfer of Seized Articles) #

(1) In the event of an accusation pursuant to Article 17, the director of a regional tax office or the head of a district tax office shall transfer, if any article has been seized, the article to the prosecutor with a list of the articles.

(2) With respect to an article seized under paragraph (1), which is in the custody of the owner, etc. pursuant to Article 9 (4), the director of a regional tax office or the head of a district tax office shall forward a certificate of custody to the prosecutor and notify the owner, etc. of the fact that the seized article was transferred to the prosecutor.

Article 19(Notice of Freedom from Suspicion and Release of Seizure) #

When the director of a regional tax office or the head of a district tax office fails to secure positive evidence of tax offense after investigating the tax offense, he/she shall notify this to the tax offense suspect and, when any article has been seized, issue an order to release such seizure.