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Tax Ruling & Legislative Amendment Service

Tax law cannot provide absolute clarity for every economic reality. This is why tax rulings and legislative amendments are essential.

Service Overview

While tax law must be clear, it is practically impossible to codify every economic phenomenon within statutory provisions. This makes authoritative interpretations of tax law (advance rulings) indispensable.

Obtaining appropriate rulings from the competent authorities—such as the National Tax Service (NTS) and the Ministry of Economy and Finance (MOEF)—is crucial for reducing tax risks and clarifying tax liabilities. However, it is often difficult for companies to achieve this on their own, highlighting the need for professional support.

To secure rulings that reflect both the legislative intent and the realities of business operations, one must combine top-level tax theory, practical expertise, and the ability to communicate effectively with tax authorities.

At CENTRIC, our team includes former high-ranking NTS officials and experts across all areas of tax law. With tailored strategies for each ruling authority, we deliver services such as:
• Submitting written inquiries and advance ruling requests to the NTS
• Requesting official interpretations from the MOEF
• Filing correction claims or tax appeals based on received rulings
• Securing refunds of overpaid taxes through follow-up procedures

Process of Advance Ruling & Legislative Amendment Services
  • Identify Facts and Current Situation
  • Analyze Existing Rulings and Precedents
  • Review Need for New Rulings or Amendments
  • Develop Rational and Persuasive Arguments
  • Select the Most Effective Resolution Method
  • Execute Advance Ruling & Legislative Amendment Procedures
Detailed Services in Advance Rulings & Legislative Amendments
  • NTS Advance Ruling (Pre-Answer Service)

    The advance ruling system allows taxpayers to submit inquiries under their real name to the National Tax Service (NTS) when a case has already occurred or is certain to occur in the near future. The NTS then provides an official response.

    To obtain such a response, inquiries must be submitted by the statutory filing deadline for the relevant tax. As an official opinion, the advance ruling is binding on subordinate authorities.

    With its extensive practical experience and expertise, CENTRIC helps clients obtain clear advance responses from the tax authorities, minimizing uncertainty in tax matters.

  • NTS Interpretation (Tax Ruling)

    When taxpayers have questions on the interpretation of tax laws, they may request a written response from the NTS.

    Although NTS rulings are not legally binding, they are issued by the highest tax administration authority and are therefore respected by subordinate authorities in practice. Normally, responses are issued by the department in charge of the relevant tax item within the NTS.

    If the matter involves a new interpretation, contradicts existing Supreme Court precedents, or raises significant fairness concerns, the inquiry is transferred to the Legal Interpretation Division.
    CENTRIC has successfully obtained numerous rulings across all tax areas and has helped clients secure refunds of overpaid taxes by proactively obtaining advance rulings.

  • MOEF Interpretation (Legislative Authority Ruling)

    The Ministry of Economy and Finance (MOEF), as the highest tax policy authority, also issues official interpretations.

    Generally, taxpayers may not directly submit inquiries to the MOEF; they must first seek an interpretation from the NTS. If the NTS response is unclear, unsatisfactory, or disputed, the taxpayer may request an MOEF interpretation, attaching the NTS Commissioner’s prior response.

    Applications are also possible when new or amended laws require interpretation, or when clarification in line with legislative intent is necessary to protect taxpayer rights.
    CENTRIC is renowned for more than simply drafting inquiries—we provide clear, well-reasoned arguments from the taxpayer’s perspective, ensuring persuasive and authoritative outcomes.

  • Legislative Amendment

    Korean tax law establishes key taxation requirements in statutes, while delegating more detailed matters to enforcement decrees and regulations.

    When laws or regulations prove unreasonable in light of economic reality, business conditions, or tax equity, legislative amendment may be pursued to safeguard taxpayer rights. The legislative process typically involves:
    • Drafting by the responsible administrative agency
    • Inter-agency consultation and public notice for comment
    • Review by the Ministry of Government Legislation
    • Deliberation at the Vice Ministers’ Meeting and Cabinet Meeting
    • Presidential approval, submission to and approval by the National Assembly
    • Final promulgation by the President
    * For enforcement decrees, no National Assembly review is required; enforcement regulations are promulgated following review by the Ministry of Government Legislation.     CENTRIC was the first tax corporation to successfully resolve unreasonable tax provisions through legislative amendment, when interpretation alone could not provide a solution.

Major Achievements

  • Valuation of shares acquired through in-kind contribution: MOEF ruling confirmed that premium valuation under Article 63 of the Inheritance and Gift Tax Act does not apply.

  • Valuation of unlisted shares: MOEF ruling clarified that for a spin-off corporation meeting Corporate Tax Act requirements, the business commencement date is deemed to be that of the pre-split division.

  • Distribution rights acquired through in-kind contribution: NTS advance ruling allowed amortization as deductible expenses under intangible fixed asset rules.

  • Carryforward of foreign tax credits from merged entities: NTS ruling clarified the method for calculating the credit limit.

  • Relocation of factories outside the Seoul metropolitan area: NTS ruling confirmed corporate tax relief under Article 63-2 of the Restriction of Special Taxation Act applies even when facilities are replaced or expanded.

  • Merger/spin-off valuation gains: NTS ruling confirmed that even if no revenue is generated during a period, as long as business activities continued without suspension, the period counts toward business operation.

  • Post-merger relocation outside metropolitan area: NTS ruling recognized that income from absorbed entities also qualifies for tax relief.

  • Delay damages on land compensation payments: NTS ruling confirmed such damages are not taxable as miscellaneous income.

  • Unlisted share valuation with shortened business year: NTS ruling clarified that if one fiscal year is shortened (e.g., 3 months), multiple short years may be aggregated and treated as one year for per-share profit calculation.

  • SME qualification upon exclusion from large business group: NTS ruling confirmed SME status applies starting from the fiscal year of notification.

  • Head office relocation with new business line: NTS ruling confirmed employees of the new line are excluded from headcount calculations for tax reduction ratios.

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