Gyeonggi-do 'Detects' Tax Delinquents Registering Businesses Under Others' Names to Evade Local Taxes

[Asia Economy (Suwon) = Reporter Lee Young-gyu] Gyeonggi Province has uncovered delinquent taxpayers who registered their businesses under others' names to evade local tax payments.

Gyeonggi Province announced on the 30th that it investigated 494 individuals who had overdue local taxes exceeding 50 million KRW from October to mid-December and identified two delinquent taxpayers who registered their businesses under others' names to avoid paying local taxes.

According to the province, Mr. A, a construction contractor residing in Yongin, Gyeonggi Province, had unpaid acquisition taxes and other taxes amounting to 450 million KRW. Concerned about forced asset seizure due to the delinquency, he registered a construction business under his son’s name, who works at a foreign company, to evade investigation but was caught during Gyeonggi Province’s violation investigation.

Also, Mr. B, a furniture manufacturer living in Siheung, closed a furniture factory he had operated for over five years to avoid collecting 74 million KRW in acquisition taxes and other delinquent taxes. Later, he registered a business in the same industry under his son’s name and actually operated it, which was revealed during the province’s investigation.

The province ordered Mr. B to pay 20 million KRW, equivalent to the delinquent amount and fines, and decided to report Mr. A to the police after he expressed refusal to pay the fine-equivalent amount.

When local tax delinquencies occur, the tax authorities initiate compulsory collection procedures on assets and income generated by the delinquent taxpayer’s assets and businesses.

Some delinquent taxpayers operating businesses try to avoid forced execution by running businesses under the names of third parties with special relationships, such as family members, instead of their own names.

According to Article 106 of the current Local Tax Basic Act, registering and using a business under another person’s name to evade local taxes or avoid forced execution is punishable by imprisonment of up to two years or a fine of up to 20 million KRW.

Kim Min-kyung, head of the Tax Justice Division of the province, emphasized, "This violation investigation revealed that high-amount delinquent taxpayers who evaded local tax payments registered and operated businesses under family members’ names. We will continue to conduct thorough investigations to prevent delinquent taxpayers from abusing business registrations and strive to eradicate tax-related fraud in Gyeonggi Province."

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