Compare three ways to fund a Korean tax-audit assessment after the amount is known: an approved extension followed by a lump sum, approved installments, or immediate payment with external borrowing. Model the general nine-month ceiling, only independently confirmed exceptional periods up to two years, conservative statutory collateral at 110% or 120%, the extra 30-day insurance term for specified collateral, quoted fees and opportunity cost, loan amortization, and month-by-month cash gaps without deciding eligibility or approval.
2026 statutory baseline
Official sources checked 2026-08-28
Separate the total assessment from the amount to defer, then enter cash available now and each month.
Must not exceed total assessed tax.
Use a conservative amount after operating costs, payroll, and taxes.
Recalculate using the actual receipt date.
The general ceiling is nine months. Use 10–24 months only after separately confirming the exceptional statutory track.
General ceiling: 9 months
The final installment must remain inside the extension period.
Use the statutory value the tax office will recognize.
Your internal hurdle rate for tied-up cash or assets.
Enter the cash contribution and actual quote for paying the assessment now. Loan principal equals tax less the cash contribution.
Must not exceed available cash or assessed tax.
1–120 months
This is a reference for a failed application or missed due date. Enter only the base confirmed as subject to Article 47-4, not automatically the full assessment.
Defaults to zero and is excluded from option ranking.
0–60 months
Lowest input funding cost among feasible options
Lump sum after extension
3 options tie for lowest cost. Compare monthly gaps and timing too.
Real estate is conservatively modeled at 120% of deferred tax.
Fee coverage period 0.750 years
Collateral fee KRW 0
Opportunity cost KRW 0
Select a card to change the monthly schedule. Feasible only means no modeled cash gap and, for deferral, no collateral gap; it does not predict approval.
Each month adds available cash and subtracts payment. Collateral opportunity cost is non-cash and does not reduce the cash balance.
Maximum gap occurs none
| Month | Opening cash | Cash inflow | Payment | Interest | Ending cash | Loan balance |
|---|---|---|---|---|---|---|
| Month 1 | KRW 30,000,000 | KRW 10,000,000 | KRW 0 | KRW 0 | KRW 40,000,000 | KRW 0 |
| Month 2 | KRW 40,000,000 | KRW 10,000,000 | KRW 0 | KRW 0 | KRW 50,000,000 | KRW 0 |
| Month 3 | KRW 50,000,000 | KRW 10,000,000 | KRW 0 | KRW 0 | KRW 60,000,000 | KRW 0 |
| Month 4 | KRW 60,000,000 | KRW 10,000,000 | KRW 0 | KRW 0 | KRW 70,000,000 | KRW 0 |
| Month 5 | KRW 70,000,000 | KRW 10,000,000 | KRW 0 | KRW 0 | KRW 80,000,000 | KRW 0 |
| Month 6 | KRW 80,000,000 | KRW 10,000,000 | KRW 0 | KRW 0 | KRW 90,000,000 | KRW 0 |
| Month 7 | KRW 90,000,000 | KRW 10,000,000 | KRW 33,333,333 | KRW 0 | KRW 66,666,667 | KRW 0 |
| Month 8 | KRW 66,666,667 | KRW 10,000,000 | KRW 33,333,333 | KRW 0 | KRW 43,333,334 | KRW 0 |
| Month 9 | KRW 43,333,334 | KRW 10,000,000 | KRW 33,333,334 | KRW 0 | KRW 20,000,000 | KRW 0 |
The monthly component is zero below KRW 1.5 million. Actual tax-office calculations can differ by days, notice unit, tax type, allocation, and payment date.
Official sources checked on August 28, 2026
Once a Korean tax audit produces an additional assessment, the taxpayer still needs to review the principal tax and penalties on the notice. After the amount is settled for planning purposes, however, a second problem begins: how to fund the bill by its due date without interrupting payroll, purchases, rent, or working capital. An extension of the payment deadline or a deferral of notice is not automatic merely because cash is tight. An approval may also require tax collateral and an approved installment schedule.
This calculator places three paths on one monthly cash-flow timeline: a lump-sum payment after an approved extension, approved installments, and immediate payment funded by external borrowing. The two deferral paths include the conservative statutory collateral requirement, quoted guarantee or setup fees, and the economic opportunity cost of tying up assets. The borrowing path includes amortized interest and origination costs. Tax principal is excluded from the funding-cost ranking because it ultimately has to be paid under every path.
The result is a planning comparison, not an eligibility decision, tax-office approval, loan approval, collateral valuation, or financial-product recommendation. Replace every zero market-rate default with a written quote and replace every proposed date or installment with the terms in the tax office's written decision.
The immediate-payment baseline subtracts cash available now from the total assessed tax. It shows the amount that must be funded immediately; it does not indicate whether statutory relief will be granted.
Cash, tax guarantee insurance, and an eligible institutional guarantee are modeled at 110% of deferred tax. Securities, land, buildings, and other eligible registered property are modeled at 120%. The shortfall compares that conservative requirement with the confirmed accepted value entered by the user.
For each month the model starts with opening cash, adds the user's conservative free cash flow, and subtracts the scheduled payment. It reports the largest negative balance, when that gap occurs, the peak monthly payment, and ending cash.
The comparison adds guarantee fees, setup costs, and collateral opportunity cost on one side, and loan interest, percentage fees, and fixed charges on the other. A zero-rate default is not a market assumption; it is a prompt to enter an independently obtained quote.
Article 13 of the National Tax Collection Act permits an extension of a payment deadline when the competent authority recognizes that payment by the deadline is difficult because of a statutory ground. The text covers circumstances such as a disaster, serious business loss or crisis, and an illness or serious injury requiring at least six months of treatment for the taxpayer or a cohabiting family member. An extension can include installment payment. Article 14 deals with deferral of a tax notice under related grounds. The calculator cannot determine whether the facts, evidence, tax stage, or application form satisfy either article.
Article 13 contains a deemed-approval rule when an application was made at least ten days before the payment deadline and no approval decision was notified within ten days from application. A calculator cannot verify whether the submission was legally complete, when it was received, whether a notice or supplementation request was issued, or whether another fact changes the legal effect. The interface therefore labels this timing only as a candidate for factual review. It never changes the result to approved.
| Days before due date | Calculator label | What to verify next |
|---|---|---|
| 10 or more | Ten-day rule fact review | Receipt, completeness, notices, and supplementation requests |
| 3–9 | Ordinary decree filing window | Submit the application and supporting evidence promptly |
| 1–2 | Late exception confirmation | Ask whether inability to file earlier is recognized |
| 0 or less | Due-date or past-due warning | Discuss collection status and any separate relief immediately |
Article 14 of the Enforcement Decree of the National Tax Collection Act generally requires the application by three days before the payment deadline. It permits filing by the deadline when the head of the competent tax office recognizes that the taxpayer could not file earlier. The application needs details such as tax type, amount, current due date, requested reason and period, and proposed installment amounts. The model's inputs are useful for organizing those facts, but the actual notice and the official form control.
Article 12 of the Enforcement Decree generally limits the extension or deferral to nine months from the following day. When the period exceeds six months, the authority may set equal installments within the three months after the first six months. That is why the default example places three installments in months seven, eight, and nine. The user can edit the proposed schedule, but the final installment must stay within the selected extension period.
The decree also contains narrowly defined tracks of up to two years for specified disaster, employment-crisis, industrial-crisis, taxpayer, and tax-type combinations. Ordinary liquidity pressure or the existence of an audit does not establish that exception. The interface opens months 10–24 only after the user checks that the exceptional track was confirmed with the authority or a qualified adviser. Even then, the output remains a sensitivity analysis rather than a legal conclusion.
Article 15 of the National Tax Collection Act allows the authority to demand tax collateral equal to the amount connected with the extension or deferral, subject to exceptions prescribed by decree. Because a collateral waiver depends on the authority's determination, the calculator does not assume one. Article 18 specifies eligible collateral and the coverage level used here: cash, tax guarantee insurance, and an eligible bank or institutional tax guarantee at 110%; other eligible collateral such as securities, land, buildings, and insured registered property at 120%.
Deferred tax is multiplied by 110% or 120% and rounded up to the won. The confirmed value must reflect the statutory valuation and what the tax office will accept, not a casual market estimate.
The model multiplies required collateral by the annual quoted fee rate and fee coverage period, then adds fixed issuance or setup costs. It conservatively treats these costs as paid at the start.
The accepted collateral value, capped at the required amount, is multiplied by the internal annual opportunity rate and extension period. It is an economic cost in the ranking but not a cash deduction in the monthly table.
Article 18 of the Enforcement Decree requires the insurance period for tax guarantee insurance and insured registered property to continue for at least 30 days beyond the necessary collateral period. The calculator adds 30 days only for those two choices. It does not automatically add 30 days to a bank guarantee. Minimum premium periods, refund rules, and provider rounding can still make a real quote differ from the annualized estimate.
| Collateral category | Coverage | Extra fee days | Critical input |
|---|---|---|---|
| Cash | 110% | 0 | Opportunity rate for tied-up cash |
| Tax guarantee insurance | 110% | 30 | Provider premium and issuance costs |
| Eligible bank or institutional guarantee | 110% | 0 | Guarantee rate, limit, and accepted form |
| Securities or real estate | 120% | 0 | Statutory value after prior-ranking rights |
| Insured registered property | 120% | 30 | Accepted value and qualifying insurance term |
| Item | Input or result | Calculation |
|---|---|---|
| Deferred tax | KRW 100,000,000 | Nine-month full deferral assumption |
| Real-estate collateral requirement | KRW 120,000,000 | 120% of deferred tax |
| Annual collateral fee at 1% | KRW 900,000 | KRW 120 million × 1% × 9/12 |
| Fixed setup cost | KRW 100,000 | Deducted from cash at the start |
| Annual opportunity rate at 4% | KRW 3,600,000 | KRW 120 million × 4% × 9/12 |
| Total collateral funding cost | KRW 4,600,000 | KRW 1 million cash cost plus KRW 3.6 million opportunity cost |
Suppose cash available now is KRW 30 million and monthly free cash is KRW 10 million. After the KRW 1 million cash collateral cost, starting cash is KRW 29 million. Nine months add KRW 90 million, and paying KRW 100 million leaves KRW 19 million. The three-installment schedule pays KRW 33,333,333, KRW 33,333,333, and KRW 33,333,334 in months seven through nine and reaches the same ending cash. Yet its peak monthly payment is about one third of the lump sum, so operating risk differs even when total principal and ending cash match.
For tax guarantee insurance on KRW 40 million, the conservative requirement is KRW 44 million. At 1.2% annually for nine months plus the statutory 30 extra days, the simple modeled fee is approximately KRW 439,397 before fixed provider charges. Provider minimum premiums and rounding can produce a different quote.
Article 13 of the Enforcement Decree of the National Tax Collection Act provides that the late-payment penalty under Articles 47-4 and 47-5 of the Framework Act on National Taxes is not imposed for the period of a qualifying approved extension or notice deferral. The two approval scenarios therefore set the late-payment penalty to zero during the modeled approved period and rank only collateral-related funding costs. This does not erase amounts outside the approval, pre-approval periods, or consequences after cancellation.
The optional delinquency reference uses Article 47-4 of the Framework Act on National Taxes and Article 27-4 of its Enforcement Decree. It adds a one-time 3% component to a user-confirmed base and, where that base is at least KRW 1.5 million, a monthly 0.67% component for the entered whole months. For a KRW 10 million confirmed base and three whole months, the display is KRW 300,000 plus KRW 201,000, or KRW 10,501,000 including the base. It is excluded from option ranking because the calculator cannot establish the legally applicable base, designated due date, daily timing, allocation, or collection expenses.
A business that cannot pay the assessment without interrupting payroll can enter free cash at the weakest seasonal level and compare when each path creates a gap. The output can support separate conversations: grounds and a proposed installment schedule with the tax office, and the minimum bridge facility with a lender.
A setup fee alone can make real-estate collateral look inexpensive. The 120% requirement can still restrict refinancing or productive use. Entering a defensible opportunity rate exposes the difference between a visible fee and the broader economic cost of encumbering the asset.
Tax guarantee insurance uses the 110% requirement and adds 30 days to the fee period. Enter the quoted annual rate and issuance charge, then retain any provider minimum premium, credit condition, or cancellation refund as a separate adjustment if it is not captured by the simple annualized formula.
No. The favorable treatment described here depends on a legally effective approval and its scope. An application that is denied, incomplete, late, or outside the approved amount or period cannot safely be modeled as approved relief.
No. The statutory conservative coverage is 110% for cash, tax guarantee insurance, and qualifying institutional guarantees, and 120% for the other eligible categories modeled here. The authority may also determine that a decree-based collateral exception applies, but the calculator does not make that determination.
Not safely. The relevant statutory valuation, prior rights, required insurance, registration, and the amount accepted by the tax office matter. Use a conservative documented amount after professional or official confirmation.
The conservative model assumes the full required collateral and its fee remain for the full extension period in both approved paths. Their total collateral funding cost is therefore equal, while monthly payment peaks and cash-gap timing can be very different. A provider's staged collateral-release terms should be modeled separately if confirmed in writing.
No. It is an arithmetic comparison based on entered quotes. It does not assess statutory grounds, credit approval, collateral enforceability, variable rates, business downside, or tax-dispute strategy. Recalculate after receiving written terms and confirm that no month compromises essential operations.
This guide was checked against the official texts current on August 28, 2026: National Tax Collection Act MST 286427, effective June 2, 2026; Enforcement Decree of the National Tax Collection Act MST 283487, effective February 27, 2026; Framework Act on National Taxes MST 288571, effective August 11, 2026; and its Enforcement Decree MST 283623, including the 2026 monthly 0.67% parameter effective July 1, 2026. The National Tax Service page is used only for the general Hometax or competent-tax-office application route. Its targeted youth-startup support terms are not generalized to every taxpayer.
Replace defaults with the assessment notice and current written quotes. Save the monthly schedule for every feasible path, identify the month with the tightest cash balance, and keep the evidence for the statutory ground, proposed installments, collateral valuation, guarantee quote, and loan quote together. Then confirm the approved amount and period, late-payment treatment, installment dates, cancellation triggers, and collateral-release timing with the competent tax office and a qualified Korean tax adviser. The most important control is not to let a modeled but unapproved extension become a missed statutory deadline.