Is failing to pay taxes due to lack of available funds also subject to tax evasion punishment?

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As a foreign corporation headquartered overseas, I'm considering establishing a corporation in Korea or proceeding with business through foreign investment. I heard there were corporate tax or acquisition tax exemptions for foreign-invested companies — can these tax reduction benefits still be received? In particular, are advanced technology businesses or those moving into free economic zones eligible for exemption, and what tax benefits can I expect? I'd like a tax specialist attorney's explanation.

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You can apply for tax payment deferment itself. However, in this case, recognition requirements that justify the approval of payment deferment, such as the business being in serious crisis, are required.

You can defer payment by applying for an extension of the payment deadline, but in this case, approval is required that recognizes the need for extension considering the taxpayer's serious injury, the taxpayer's circumstances, and economic situation.

While I cannot know your situation clearly, if delinquency is already ongoing, you would need to prove there was no intent to mitigate punishment accordingly.

Under the National Tax Collection Act, if taxes are not paid even during the urging period after the payment deadline has passed, the taxpayer's property is seized and disposed of through compulsory collection procedures to cover the unpaid tax amount.

If you fail to pay taxes claiming you have no money due to economic difficulties, you will face the following disadvantages.

Delinquency disposition, that is, the delinquent's property may be seized and sold.

However, if there is intent and you are accused of evasion through fraudulent acts, the Tax Offense Punishment Act may apply.

Tax evasion is established when tax amounts are siphoned off, refunded, or deducted through fraud or other illegal acts.

The Tax Offense Punishment Act is a law that stipulates criminal punishment when a taxpayer intentionally evades taxes or commits fraudulent acts. As you mentioned, you don't go to prison just because you can't pay taxes due to lack of money.

However, when committing tax evasion through fraud or unjust methods as mentioned in the Tax Offense Punishment Act, if you cannot specifically explain acts with strong intent such as issuing large false tax invoices rather than mistakes, you may face tax evasion punishment.

If you are punished for tax evasion, you may face imprisonment of up to 3 years or a fine of up to 3 times the evaded tax amount.

If committed habitually, imprisonment and fine may be imposed concurrently.

To prove that you faithfully reported taxes such as VAT and corporate tax and that there was no intent in tax delinquency, please seek the assistance of a tax evasion specialist attorney.