National Assembly passes bill to delay tax audits for distressed firms

The National Assembly passed a revised bill granting legal grounds to delay tax audits on businesses facing severe financial distress.

Lawmakers approved the measure following complaints that local tax offices continued auditing firms despite central promises of relief after last year's Tmon and WeMakePrice payment disputes. While the National Tax Service had pledged support, existing laws lacked clear provisions to suspend investigations for companies fearing insolvency, leading some field offices to proceed with probes because they cited a lack of directives from headquarters.

The revision explicitly adds bankruptcy concerns as a valid reason for requesting an audit deferral under Article 81-7 of the act, correcting an imbalance where current regulations permit delays for personal reasons such as illness or long-term business trips but exclude entities facing default. Proponents argued this exclusion was inequitable, noting that the National Tax Collection Act already allows payment extensions for taxpayers facing significant business losses or ruin.

Rep. Park Min-kyu and 15 co-sponsors proposed the bill on Jan. 8 to ensure distressed companies, including victims of the Tmon and WeMakePrice crises, receive equal tax administration support without discrimination. The Financial and Economic Planning Committee reviewed the proposal before the plenary session voted to pass the amended version on the 23rd.