Gyeonggi-do Reports 11 Individuals for Local Tax Evasion and Name Lending Following Violation Investigations

[Asia Economy (Suwon) = Reporter Lee Young-gyu] Gyeonggi Province announced on the 5th that it investigated 71 local tax violation cases last year, including evading tax obligations through fraudulent means or avoiding asset tracing by lending names, and reported 11 people.

The investigation of violation cases involves tax officials directly interrogating delinquent taxpayers or conducting searches and seizures upon designation by the local prosecutor's office chief. If illegal activities are detected, fines can be imposed or cases can be reported to investigative agencies. The province operates a dedicated local tax violation case investigation team consisting of four members.

Over the past year, through prosecutor designation, the province investigated 71 violation cases such as local tax evasion and evasion of delinquency disposition, identifying 11 individuals including 10 for evading acquisition tax on newly constructed private buildings and 1 for name lending.

In a major case, three co-builders including Mr. A colluded with the construction company representative while constructing urban-type residential housing and officetels in the province, drafting a down contract 1.5 billion KRW lower than the actual contract amount. Using the down contract, they failed to pay 36 million KRW in acquisition tax and other taxes. Mr. A and two others were reported for local tax evasion, and the construction company representative and one other were reported for aiding and abetting.

Mr. B, the building owner, prepared a separate contract increasing the contract amount by 400 million KRW due to an extension of the construction period, but underreported acquisition tax using the previous contract, evading 13 million KRW in local taxes.

Construction businessman Mr. C, after defaulting on 450 million KRW in acquisition tax and other taxes, fearing compulsory execution on personal assets, registered and used his business under the name of his son, who works at a foreign company. Accordingly, the province decided to report Mr. C to the police for refusing to pay a fine of a considerable amount.

Delinquent taxpayer Mr. D, after his father's death, renounced his legal inheritance share and allowed co-heirs to receive the inheritance. When the province suspected evasion of delinquency disposition and conducted a violation case investigation, Mr. D voluntarily paid the full delinquent amount of 15 million KRW.

Like Mr. D, five people voluntarily paid their delinquent taxes following violation case investigations, totaling 106 million KRW. The province explained that even if the delinquent amount is paid, if evasion of delinquency disposition under the 'Local Tax Basic Act' is established, criminal charges may apply.

Kim Min-kyung, head of the Tax Justice Division of the province, said, "Violation case investigations are a powerful means to inform that criminal punishment can be imposed for unfairly underpaying local taxes or evading payment of delinquent taxes," adding, "Going forward, Gyeonggi Province will continue to systematically respond to increasingly sophisticated tax evasion and evasion of delinquency disposition through the dedicated violation case investigation team to establish tax justice."

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