(1) A tax investigation shall be conducted by the head of a tax office or the commissioner of a regional tax office having a jurisdiction over the place of tax payment: Provided, That the Commissioner of the National Tax Service (the commissioner of a regional tax office in cases of rearranging jurisdictions of tax offices under the jurisdiction of the same regional tax office) may rearrange the jurisdiction in cases prescribed by Presidential Decree, including where a jurisdiction over the principal business place, etc. of the taxpayer is not the same as a jurisdiction over the place of tax payment, or it is not proper for the head of the competent tax office or the commissioner of the competent regional tax office to conduct the tax investigation. <Newly Inserted on Jan. 1, 2014>
(2) In any of the following cases, a tax official may periodically select taxpayers (hereinafter referred to as "periodic selection") subject to tax investigation to verify the propriety of returns. In such cases, the tax official shall fairly select such taxpayers in accordance with objective criteria: <Amended on Jan. 1, 2013; Jan. 1, 2014; Dec. 19, 2017>
1. Where the Commissioner of the National Tax Service acknowledges that a taxpayer is suspected to be non-compliant from the findings of periodic compliance analysis of the taxpayer's tax returns, which takes into consideration accounting compliance materials, such as materials for assessment, tax affair information, and auditor's opinions and reports by external audit, etc. prescribed by the Act on External Audit of Stock Companies;
2. Where it is necessary to verify whether a taxpayer that has not been subject to a tax investigation for the same taxable items for at least four taxable periods has filed tax returns in a compliant manner, as prescribed by President Decree, considering the category and scale of his or her business, economic concentration, etc.;
3. Where a sample tax investigation is to be conducted under a random sampling method.
(3) In addition to investigation by a periodic selection provided for in paragraph (2), a tax official may also conduct a tax investigation in any of the following cases: <Amended on May 2, 2011; Jan. 1, 2014; Dec. 15, 2015>
1. Where a taxpayer fails to fulfill his or her tax compliance obligations under tax-related statutes, such as filing a return, submitting a document certifying compliant filing, preparing, delivering, and submitting a tax invoice or an invoice, or preparing and submitting a payment record;
2. Where a taxpayer is suspected of false transactions, such as undocumented transactions or disguised or fictitious transactions;
3. Where concrete information on a taxpayer's tax evasion is reported;
4. Where an evident material exists to admit a suspicion of omissions or errors in the details of a return by a taxpayer;
5. Where a taxpayer provides a tax official with money and other valuables or helps a person provide a tax official with money and other valuables in relation to the duties of the tax official.
(4) A tax official may conduct a tax investigation to determine the tax base and the tax amount for the taxable items fixed by a decision of investigation by tax authorities. <Amended on Jan. 1, 2014>
(5) A tax official may choose not to conduct a tax investigation for a person that satisfies all the following requirements: Provided, That the same shall not apply where objective evidentiary materials obviously prove that the under-reported return has been filed: <Amended on Act No. Jan. 1, 2014>
1. An enterpriser whose amount of revenue by business category does not exceed the amount prescribed by Presidential Decree;
2. An enterpriser whose books and records meet the requirements prescribed by Presidential Decree.[This Article Wholly Amended on Jan. 1, 2010][Title Amended on Jan. 1, 2014]