Gyeonggi-do Reports 10 Including Building Owners for Acquisition Tax Evasion by Omitting Billions in Construction Costs

[Asia Economy (Suwon) = Reporter Lee Young-gyu] Gyeonggi Province has identified and reported to investigative authorities 10 individuals, including building owners and construction company representatives, who underpaid acquisition tax by submitting two separate construction contracts and reporting construction costs lower than the actual contract amount.

Since 2018, Gyeonggi Province has conducted tax investigations in cities and counties, selecting 43 cases of omitted contract amounts out of 520 underreported acquisition tax cases for newly constructed buildings in the province. From April to August, the province investigated by cross-checking the building owners' submitted documents with the construction companies' ledgers related to the contract amounts.

When a building owner obtains usage approval for a newly constructed building, they incur an acquisition tax obligation. The taxable amount is calculated based on the contract amount voluntarily reported by the taxpayer, including design and supervision fees and construction-related loan interest.

Through this special investigation, the province uncovered five cases of false reporting, including those who initially prepared duplicate contracts or deliberately submitted contracts with previously stated contract amounts despite increasing the contract amount.

The total contract amount for the buildings involved in the false acquisition tax reports was 16.2 billion KRW. Of this, 3.3 billion KRW was omitted, and the building owners were found to have evaded acquisition tax (including local education tax and special rural tax) amounting to 104 million KRW.

In one case, three co-building owners, including Mr. ㄱ, colluded with a construction company representative to create a down contract for acquisition tax reporting purposes, reporting a contract amount 1.5 billion KRW lower than the actual amount for urban lifestyle housing and officetels constructed in the province.

Building owner Mr. ㄴ constructed a large commercial building in a land development district within the province and separately prepared a contract 600 million KRW lower than the actual contract amount. At the time of completion, he even falsified the construction company's progress payment request documents to match the down contract amount, demonstrating meticulous planning. The province detected the false reporting by comparing the owner's submitted documents with the construction company's ledgers.

Two co-building owners, including Mr. ㄷ, constructed a multi-family house and prepared a separate contract reflecting a 600 million KRW increase due to an extension of the construction period. However, when reporting acquisition tax, they submitted a contract modification showing only the construction period change along with the original contract, which led to their exposure.

The province has reported 10 individuals, including building owners and construction company representatives involved in these five cases, to investigative authorities for local tax evasion and aiding and abetting tax evasion.

Kim Min-kyung, Director of the Tax Justice Division of Gyeonggi Province, emphasized, "Acquisition tax is based on the taxpayer's voluntary reporting under their responsibility, so sincere reporting by taxpayers is paramount. Gyeonggi Province will support sincere reporting to the fullest and respond strictly with a zero-tolerance policy toward intentional tax evasion and criminal acts."

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