1. Overview
Due to the increasing diversity of transactions and complexity of tax laws, errors or omissions may arise when reporting a tax base and tax liability. In Korea, the Framework Act on National Taxes allows taxpayers to correct such errors or omissions by filing an amended tax return or a claim for reassessment.
2. Key Provisions
(1) Amended Tax Return
A taxpayer who has filed a tax base return by the statutory filing deadline may file an amended tax return in any of the following circumstances:
① Where the tax base or tax liability reported in the original tax return is less than the amount that should have been reported under the applicable tax laws;
② Where the amount of loss or tax refund reported in the original tax return exceeds the amount that should have been reported under the applicable tax laws; or
③ Where the original return was incomplete due to an omission in the withholding agent’s tax settlement process, an omission in the tax adjustment process, or other similar reasons.
A taxpayer wishing to file an amended tax return must prepare and submit the amended tax base return within the statute of limitations for tax assessment, which is generally five years.
(2) Claim for Reassessment
A taxpayer who has filed a tax base return by the statutory filing deadline may file a claim for reassessment. In general, a claim for reassessment may be made in any of the following circumstances:
① Where the tax base or tax liability reported in the original tax return exceeds the amount that should have been correctly reported under the applicable tax laws; or
② Where the amount of loss, tax credit, or tax refund reported in the original tax return is less than the amount that should have been reported based on a correct calculation under the applicable tax laws.
A claim for reassessment must be filed within five years from the statutory filing deadline. Upon receiving such a claim, the competent tax office must, within two months from the date of receipt, either reassess the tax base and tax liability or notify the taxpayer that there are no grounds for reassessment.
3. Implications
In the case of an amended tax return, voluntarily filing an amended return does not reduce the underlying tax liability itself. However, depending on when the amended return is filed, 10% to 90% of the applicable penalties may be reduced. This reduction does not apply, however, where the taxpayer files an amended tax return after becoming aware in advance that the tax authorities intend to reassess the tax base and tax liability.
A claim for reassessment, on the other hand, is an important mechanism for protecting taxpayers’ rights. Once the statutory period for filing a claim has expired, the taxpayer generally can no longer exercise this right.
Accordingly, if an error or omission is identified in a previously reported tax base or tax liability, it is advisable to promptly consult with a tax professional and take appropriate corrective action.
English 
Korean