Extended statute of limitations on tax assessment for cross-border transactions

l Extended statute of limitations on tax assessment for cross-border transactions

Current

Proposed Changes

n Current statute of limitation

· Fraud or other fraudulent acts: 15 years

· Non-reporting: 7 years

· Under-reporting: 5 years

n Cross-border transaction concept is introduced and the statute of limitation period is extended:

· Fraud or other fraudulent acts: 15 years

· Non-reporting: 10 years

· Under-reporting: 10 years

To improve the effectiveness of taxation on overseas tax evasion, the proposals newly expand the range of cross-border transactions to include transactions of overseas assets or services made between residents of Korea. In addition, the statute of limitation on tax assessment for cross-border transactions will be extended from 7 years for non-reporting and 5 years for under-reporting to 10 years for both. This revision will be effective for the transactions of which tax liabilities accrue on or after January 1, 2019.