Gyeonggi-do Uncovers 44 Corporations Including Tax Evasion Cases... Recovers 15 Billion KRW

[Asia Economy (Suwon) = Reporter Lee Young-gyu] Corporations that falsely reported operating distribution industries or factories to receive tax reductions and then sold them to other corporations, thereby evading taxes, were massively uncovered in an investigation by Gyeonggi Province.

Gyeonggi Province announced on the 30th that it conducted local tax audits on 46 corporations in the province during the first half of this year and found 44 corporations violating laws such as underreporting, fraudulent tax reductions, and non-reporting, collecting over 15 billion KRW in additional taxes.

The investigation targets were corporations that acquired real estate worth over 5 billion KRW or received local tax reductions exceeding 100 million KRW, selected upon requests from city and county offices and through the review process of the provincial local tax review committee.

The province explained that by establishing a 'dedicated investigation team by corporation type' for the first time this year and conducting specialized tax audits, it imposed an additional 2.9 billion KRW compared to 12.1 billion KRW last year.

In one case, Corporation A, a wholesale and retail business, built a new complex shopping mall in a metropolitan area and registered it as a distribution industry (large-scale store), which is exempt from heavy taxation, thus paying less acquisition tax by applying the general tax rate. However, it was confirmed that the property was sold to another corporation within the grace period. This corporation ultimately paid an additional 4.8 billion KRW in acquisition tax after applying the heavy tax rate.

Corporation B, operating in manufacturing, received land in an industrial complex and built a new factory, receiving local tax reductions. However, it was found that during the direct usage period, the land and factory were sold to an affiliated company. The province imposed 1.5 billion KRW in local taxes, including acquisition tax and property tax, on this corporation.

Corporation C, a housing construction business operator in an urban development district, and others were found to have underreported acquisition tax by omitting legally required charges such as water and sewage user charges and metropolitan transportation facility charges, which must be included in the acquisition cost when constructing apartment complexes. They were fined 1.2 billion KRW in this investigation.

According to the current 'Local Tax Basic Act,' if a taxpayer fails to report local taxes on time or underreports, they must additionally bear a penalty of up to 20% for inaccurate reporting and a 0.25% penalty for delayed payment based on the number of days delayed.

Choi Won-sam, Director of the Tax Justice Division of the province, emphasized, "With the government's policy to expand housing supply, cases subject to investigation such as large-scale land development projects like the 3rd New Town, housing construction projects, and reconstruction and redevelopment are expected to steadily increase. We will make further efforts to realize 'tax justice' through thorough tax audits to ensure no tax sources are omitted."

This content was produced with the assistance of AI translation services.