Illegal Modification of High-End Imported SUVs, Companies Receiving Unfair Tax Benefits Exposed

Employees of an automobile import company are moving vehicle seats to modify the structure of SUVs imported from overseas. The company was found to have improperly received tax benefits by changing the structure from 7 seats to 9 seats. Photo by Korea Customs Service

[Asia Economy (Daejeon) Reporter Jeong Il-woong] A company importing high-priced American SUVs was caught by customs authorities for receiving unfair tax benefits through illegal modifications.

The Seoul Regional Customs Office of the Korea Customs Service announced on the 31st that it had uncovered two automobile import companies for violating the Customs Act.

The companies under investigation are accused of exploiting the fact that 9-seater vehicles are eligible for various tax benefits by importing 20 American-made 7-seater SUVs (worth about 4 billion KRW at market price), installing additional seats to falsely declare them as 9-seaters to customs.

It was confirmed that the companies received unfair tax benefits of about 13 million KRW per vehicle through this method. At the time of import, 9-seater vehicles were exempt from individual consumption tax (3.5% of the product price) and education tax (30% of the individual consumption tax), benefits which were abused.

In particular, after modifying the 7-seater vehicles into 9-seaters, the companies obtained self-certification for 9-seater automobiles from certification agencies, but when selling domestically, they removed the fourth-row seats and delivered the vehicles to customers as the original 7-seater models.

This scheme was uncovered when the Seoul Regional Customs Office investigation team obtained related information and started an investigation after confirming that the rear seats of the same SUVs brought into Pyeongtaek Port differed from those declared at import.

The investigation revealed that the vehicles were long-body models with a body length of 5.8 meters and were high-priced vehicles exceeding 150 million KRW.

It was also found that these vehicles were manufactured and sold in the U.S. as 7-seaters (1st row - 2 seats, 2nd row - 2 seats, 3rd row - 3 seats) and were declared as 7-seater vehicles when directly imported into Korea.

A Seoul Regional Customs Office official stated, “Besides the companies caught, we believe similar illegal activities are being covertly conducted, so we plan to strengthen inspections and investigations at the import declaration stage,” adding, “We will also promote cooperation with vehicle certification agencies to enhance the effectiveness of crackdowns.”

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