Article 26-2(Limitation Period for Imposition of National Taxes) #
(1) The period during which a national tax can be imposed (hereinafter referred to as "limitation period for imposition") shall be five years from the date the national tax becomes imposable: Provided, That in cases of cross-border trades (referring to international transactions defined in Article 2 (1) 1 of the Adjustment of International Taxes Act (hereinafter referred to as "international transaction") and a transaction in which both parties to the transaction are residents (including a domestic corporation and the domestic place of business of a foreign corporation), which is related to the sale and lease of assets overseas; hereinafter the same shall apply), such period shall be seven years from the date the national tax can be imposed. <Amended on Dec. 31, 2019>
(2) Notwithstanding paragraph (1), in any of the following cases, the limitation period for imposition shall be as follows: <Newly Inserted on Dec. 31, 2019>
1. Where a taxpayer fails to file a tax base return until the statutory due date of return: Seven years (10 years in cases of a cross-border trade) from the date the relevant tax can be imposed;
2. Where a taxpayer evades a national tax by fraud or other improper acts (hereinafter referred to as "improper acts") or has obtained a refund or deduction of a national tax: 10 years (15 years where he or she evaded, or obtained a refund or deduction of, a national tax due to any improper act committed in cross-border trades) from the date on which such national tax can be imposed. In such cases, where the national tax evaded, refunded, or deducted due to an improper act is a corporate tax, the same shall apply to the income tax or corporate tax for the amount disposed of under Article 67 of the Corporate Tax Act in connection therewith;
3. Where a taxpayer becomes liable to pay an additional tax as follows: 10 years from the date the relevant additional tax can be imposed:
(a) Article 81-10 (1) 4 of the Income Tax Act;
(b) Article 75-8 (1) 4 of the Corporate Tax Act;
(c) Article 60 (2) 2 and Article 60 (3) and (4) of the Value-Added Tax Act.
(3) If a loss carried forward is deducted under Article 45 (3) of the Income Tax Act, or Article 13 (1) 1, 76-13 (1) 1, or 91 (1) 1 of the Corporate Tax Act, in the taxable period after the taxable period within which the expiration date of the period referred to in paragraphs (1) or (2) 1 falls, notwithstanding paragraphs (1) and (2) 1, the limitation period for imposition of income taxes or corporate taxes for the period during which the relevant loss has occurred shall be one year from the statutory due date of return for the taxable period during which the loss carried forward was deducted. <Newly Inserted on Dec. 31, 2019>
(4) Notwithstanding paragraphs (1) and (2), the limitation period for the imposition of inheritance taxes or gift taxes shall be 10 years from the date on which a national tax can be imposed, and 15 years from the date on which any of the following is applicable. Where the income tax under the latter part, with the exception of the items, of subparagraph 1 of Article 88 of the Income Tax Act is imposed, along with gift tax for gift of encumbered property, the same shall also apply to the limitation period for the imposition of said income tax: <Amended on Dec. 31, 2019>
(a) Where a taxpayer evades the inheritance tax or gift tax, or obtains a tax refund or deduction by improper act;
(b) Where a return is not filed under Article 67 or 68 of the Inheritance Tax and Gift Tax Act;
(c) Where a person who files a return under Article 67 or 68 of the Inheritance Tax and Gift Tax Act files a false return or omitted to file a return prescribed by Presidential Decree (limited to the portion reported falsely or omitted);
(5) Where a taxpayer evades inheritance tax or gift tax (in the case of subparagraph 7, a national tax related to the relevant title trust shall be included) by improper act in any of the following cases, the inheritance tax and gift tax can, notwithstanding paragraph (4), be levied within one year from the date the taxpayer becomes aware of inheritance or gift of the relevant property: Provided, That the same shall not apply where a successor, donor, or donee dies, and where the property value as a basis for calculating the amount of evaded tax (referring to the sum of values of any of the following properties) is not more than five billion won: <Amended on Dec. 31, 2011; Jan. 1, 2013; Dec. 20, 2016; Dec. 31, 2019; Dec. 31, 2022>
1. Where a successor or donee acquires the property of a decedent or donor held in the name of a third party;
2. Where a successor acquires property to be acquired by a decedent under a contract without registering or recording such property, entering the change of the holder thereof, as the inheritance began during the period of contract execution;
3. Where a successor or donee acquires inherited or gifted property located overseas;
4. Where a successor or donee acquires inherited or gifted property such as securities, paintings and writings, and curios for which registration, recording, or entry of change of a holder is not required;
5. Where a donee holds or uses and makes profits from financial assets defined in subparagraph 2 of Article 2 of the Act on Real Name Financial Transactions and Confidentiality registered in the name of the donee;
6. Where a successor acquires the property of a decedent who is a non-resident under subparagraph 2 of Article 3 of the Inheritance Tax and Gift Tax Act, located in the Republic of Korea;
7. Where the property registered in the name of another person is deemed donated under Article 45-2 of the Inheritance Act and Gift Tax Act;
8. Where a successor or donee acquires a virtual asset under the Act on Reporting and Using Specified Financial Transaction Information which is inherited or gifted property, not via any virtual asset service provider under the same Act (limited to a person whose report has been accepted under Article 7 of the same Act).
(6) Notwithstanding paragraphs (1) through (5), the commissioner of a regional tax office or the head of a tax office may correct the violation or take other necessary measures before the periods classified as follows expire: <Amended on Dec. 31, 2011; Dec. 20, 2016; Dec. 19, 2017; Dec. 31, 2018; Dec. 31, 2019; Dec. 22, 2020; Dec. 21, 2021; Dec. 31, 2022; Dec. 31, 2023>
1. Where a decision or judgment is made final and conclusive on the objection, or request for examination or adjudgment under Chapter Ⅶ, request for examination under the Board of Audit and Inspection Act, or litigation under the Administrative Litigation Act: One year from the date when the decision or judgment is made final and conclusive;
1-2. Where a decision or judgment referred to in subparagraph 1 is made final and conclusive and such decision or judgment governs a tax base or amount of tax; and thereby it is necessary to adjust a tax base or amount of tax for other items of taxes (limited to the same taxable period) or other taxable periods (limited to the same item of taxes) connected therewith: One year from the date when the decision or judgment referred to in subparagraph 1 is made final and conclusive;
1-3. Where any income referred to in Article 21 (1) 23 or 24 of the Income Tax Act is confirmed to have been generated as a result of a final and conclusive judgment on litigation under the Criminal Procedure Act: One year from the date on which the judgment is made final and conclusive;
2. Within three years (where a tax treaty prescribes otherwise, the provisions of the treaty shall prevail) after the date when it is known that any measure which happens to cause taxation in violation of the tax treaty has been taken, where an application for mutual agreement is made pursuant to the tax treaty and then mutual agreement is reached therefor; One year from the closing date of a procedure for mutual agreement;
3. Where a request for correction is made pursuant to Article 45-2 (1), (2), (5), or (6), or pursuant to Articles 19 (1) and 33 (2) of the Adjustment of International Taxes Act or a recommendation for adjustment is made pursuant to Article 20 (2) of the same Act: Two months from the date when such request for correction or recommendation for adjustment is made;
4. Where a request for correction or recommendation of adjustment provided for in subparagraph 3 is filed or made and such request or recommendation governs a tax base or amount of tax, and therefore it is necessary to adjust a tax base or amount of tax for other taxable periods connected therewith: Two months from the date when the request for correction or recommendation of adjustment provided for in subparagraph 3 is filed or made;
5. With regard to a transaction, act, etc. which formed the basis of calculation of a tax base and amount of tax in the initial return, determination or correction, where a judgment (including any reconciliation or any other act that has the same effect as a judgment) on a lawsuit brought related thereto is made final and conclusive that such calculation should be made, based on another transaction, act, etc.: One year from the date when the judgment is made final and conclusive;
6. Where a request for tax information necessary to impose and collect taxes under Article 36 (1) of the Adjustment of International Taxes Act (hereafter in this subparagraph referred to as "tax information") is made within the period under paragraph (1) in connection with cross-border trades to the competent foreign authority and such information is received within two years from the date such request is filed: One year from the date tax information is received.
7. Where the effective tax rate by country under Article 69 (2) of the Adjustment of International Taxes Act is changed: One year from the date on which it is known the effective tax rate by country is changed;
(7) Notwithstanding paragraphs (1) through (5), if a person falls under any of the following cases due to a decision or judgment referred to in paragraph (6) 1, the original disposition of imposition may be revoked, and a correction or other necessary disposition may be issued to a person classified as follows within one year from the date such decision or judgment becomes final and conclusive: <Newly Inserted on Dec. 31, 2019; Dec. 31, 2022>
1. Where the fact that a name was lent is verified: A person who actually runs a business;
2. Where it is confirmed that the ownership of the property subject to taxation is just nominal and there is another person who is the de facto owner of such property: The de facto owner of the property;
3. Where a beneficial owner of the domestic source income under Article 119 of the Income Tax Act and Article 93 of the Corporate Tax Act (hereafter in this paragraph referred to as "beneficial owner of the domestic source income") is verified: A beneficial owner of the domestic source income or a withholding agent under Article 156 of the Income Tax Act and Article 98 of the Corporate Tax Act.
(8) Notwithstanding paragraphs (1) through (5), Article 51 of the Adjustment of International Taxes Act shall apply where the mutual agreement procedure is in progress in accordance with a treaty concluded to prevent double taxation of taxes in connection with a limitation period for the imposition of national taxes. <Newly Inserted on Dec. 31, 2019; Dec. 22, 2020>
(9) Dates on which national taxes can be imposed under paragraphs (1) through (4) shall be prescribed by Presidential Decree. <Amended on Dec. 31, 2018; Dec. 31, 2019>>
[This Article Wholly Amended on Jan. 1, 2010]
[Title Amended on Dec. 31, 2019]