Gyeonggi-do Detects 2,272 Cases of Tax Omission and Reduction... 3 Billion KRW Reclaimed

[Asia Economy (Suwon) = Reporter Lee Young-gyu] Gyeonggi Province has uncovered numerous cases of legal violations, such as using real estate for different purposes or selling it to third parties within the grace period after receiving acquisition tax reductions, or acquiring luxury homes subject to higher tax rates but reporting them under general tax rates.

From February to June, the province conducted a joint local tax audit with four local governments?Gunpo, Yongin, Osan, and Anseong?and identified 2,272 cases of tax omissions, collecting a total of 3 billion KRW in additional taxes, the province announced on the 3rd.

By category, the cases included ▲1,266 cases of failure to report registration and license tax ▲619 cases of failure to report acquisition tax for temporary structures, inheritance, and errors in tax rate reporting ▲218 cases of using or not using real estate for other purposes within the acquisition tax reduction grace period ▲167 cases of failure to report resident tax ▲2 cases of luxury homes subject to acquisition tax higher rates being reported under general tax rates.

For example, Mr. A, residing in Osan, failed to pay registration and license tax not only for development activity permits but also for farmland conversion, resulting in an additional tax collection of 2 million KRW during this investigation.

Osan-based Corporation B, a startup small business, acquired real estate for business use and received acquisition tax reductions but violated the grace period by leasing the property to another corporation for two years from the initial use date, resulting in an additional tax collection of 31 million KRW.

Mr. C, living in Anseong, was caught after underreporting acquisition tax when building a new house. Although the newly built house qualified as a luxury home subject to a higher acquisition tax rate, he reported it under the general tax rate, paying less tax. The province collected an additional 110 million KRW. The acquisition tax rate is 2.8% for general homes but 10.8% for luxury homes.

Mr. D, residing in Gunpo, and others were found to have registered as rental business operators and acquired real estate under the pretense of rental but used it as their own residence, resulting in an additional tax collection of 195 million KRW.

Mr. E, living in Yongin, built and lived in a house without usage approval and was caught, paying 13 million KRW in acquisition tax.

Under the current Local Tax Basic Act, if a taxpayer fails to report the tax base by the statutory deadline, a non-reporting penalty of up to 20% of the tax due is imposed. Additionally, if local taxes are not paid by the due date or are underpaid, a late payment penalty of 0.025% per day is applied.

Choi Won-sam, Director of the Tax Justice Division of the province, emphasized, "To establish a fair tax order, Gyeonggi Province and its cities and counties will cooperate to strictly enforce tax administration according to laws and principles."

Meanwhile, through joint local tax audits with cities and counties, the province has discovered and collected 29.1 billion KRW in omitted taxes over the past three years. In the second half of the year, joint audits covering all local taxes will be conducted with five cities and counties, including Suwon.

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