Business account registration required once sales top 300 million won

Accountant neither registered account nor informed client

Court finds duty of care violated, orders 60% compensation

This image is for illustrative purposes only and is not directly related to the article. [Getty Images Bank]
This image is for illustrative purposes only and is not directly related to the article. [Getty Images Bank]

A court has ruled that a certified public accountant must compensate a client who lost a tax exemption and was forced to pay approximately 54 million won ($40,500) in taxes because a business bank account was never registered with tax authorities. The accountant had argued there was no obligation to provide legal advice on tax reductions beyond filing returns, but the court rejected that claim.

According to legal sources, Judge Choi Hee-dong of Ulsan District Court's Civil Division 17 ruled Oct. 16 in favor of the plaintiff, a self-employed individual identified only as A, in a damages suit filed against accountant B. The court ordered B to pay 32.4 million won — 60 percent of the approximately 54 million won in damages the court recognized.

According to the facts established by the court, A, an e-commerce retailer, had entrusted B with tax filing services from the time the business was founded.

A had been receiving tax reductions under a program for young entrepreneurs at small and medium-sized enterprises. When annual sales exceeded 300 million won in 2023, A became subject to double-entry bookkeeping requirements starting the following year. Double-entry bookkeeping requires not only tracking cash inflows and outflows but also systematically recording the causes and results of asset and expense transactions.

The tax office sent A a notice around June 2024 instructing the registration of a business bank account, but A did not comply. As a result, A lost eligibility for the youth entrepreneurship tax reduction. When filing the comprehensive income tax return around November 2025, A was required to pay approximately 54 million won in taxes that could otherwise have been avoided.

After paying the tax, A filed suit against B seeking 54 million won in damages.

During the trial, A's side argued that B had a duty of care either to register the business account directly or to explain the requirement, and that business account registration was either included in or closely connected to the scope of tax filing services.

B rebuffed the claim. B's side said that providing legal advice on tax reductions beyond filing tax returns was not part of the delegated work. B further said that because A had received the tax office notice but neither registered the account personally nor informed B of it, B bore no liability for the resulting damages.

The court sided with A.

The court found that B had been involved in filing A's comprehensive income tax return for 2023 and, in doing so, was aware that A's sales that year had exceeded 300 million won. The court said B was therefore in a position to know that A was required to register a business account by June of the following year.

The court added that given those circumstances, it was reasonable to conclude that B, as a tax professional, had an obligation either to register the business account directly or to inform A of the requirement.

The court said B had been delegated tax filing duties and was therefore obligated to be familiar with relevant laws, including the Income Tax Act, and to exercise due care to prevent harm to A. By neglecting that duty and allowing the damages to occur, B was liable for compensation.

However, the court capped B's liability at 60 percent.

The court noted that A was also at fault for failing to share the notice received from the tax office with B, and that this contributed significantly to the occurrence and expansion of the damages. The court said it set the apportionment of fault after taking into account the circumstances under which B came to handle A's tax filings and all other relevant factors.

The ruling was finalized Nov. 4. Neither party appealed the first-instance decision.


notstrong@heraldcorp.com