[National Tax Service]
[National Tax Service]

Advertisements directly comparing tax accountants' fees — such as claims of "No. 1 lowest fees" — will be banned under new rules being drafted by South Korea's tax authority. Ads displaying an accountant's actual fees or work results backed by objective evidence, however, will remain permitted.

The National Tax Service announced Thursday that it has drawn up a proposed notice titled "Regulations on Advertising Prohibited for Tax Accountants and Others" and will accept public comments through Sept. 9.

Under the proposal, tax accountants and related practitioners would be barred from running advertisements that directly compare their fees with those of competitors. Ads promising cash, gifts or other economic benefits to prospective clients would also be prohibited.

Claims of superiority without objective basis — such as "best in the country," "top in the industry" or "No. 1 refund rate" — would likewise be banned.

Ads citing work-performance figures such as refund rates, tax-saving rates or success rates without showing how those figures were calculated would also be off-limits.

Ads that accurately state an accountant's actual fees or present work results supported by objective documentation would still be allowed.

Supporting documentation must be retained for three years from the date an advertisement is posted or distributed. The proposed rules would apply not only to individual tax accountants but also to tax corporations, certified public accountants and lawyers performing tax-agent work, their firms, and foreign tax advisers and their firms.

The same standards would apply to advertisements produced by third parties — other corporations, individuals or websites — on behalf of a tax accountant. For example, a bank that features a tax accountant it has hired in its own advertising would be required to comply with the restrictions.

The National Tax Service plans to set up a tip-off channel on its website for reporting violations. Dedicated task forces will also be established at related organizations, including the Korean Tax Accountants Association and the Korean Institute of Certified Public Accountants.

Tax accountants and other practitioners found to have violated the rules could face disciplinary action from the Ministry of Economy and Finance.

The proposal builds on advertising regulations added to the Tax Accountant Act in December last year and put into effect in June, providing more detailed standards for implementation.


oskymoon@heraldcorp.com