Gyeonggi-do Detects 12,000 Cases of Tax Reduction and Non-Reporting, Recovers 30.2 Billion Won

Gyeonggi Provincial Government Gwanggyo New Office Building

[Asia Economy (Suwon) = Reporter Lee Young-gyu] Gyeonggi Province has uncovered numerous violations of laws and regulations, such as selling real estate to third parties before the grace period for acquisition tax exemptions ended, or acquiring luxury homes subject to higher tax rates but reporting them at reduced general tax rates.

Gyeonggi Province announced on the 19th that from February to November, it conducted joint local tax investigations with 11 cities and counties including Gimpo and Hwaseong, uncovering 12,383 cases of tax omissions and collecting an additional 30.2 billion KRW in taxes.

This amount represents a 217% increase compared to the previous year (13.9 billion KRW) and is the highest collection amount in the past five years.

The province conducted investigations by combining various information such as National Tax Service taxation data, social insurance imposition details, and national subsidy payment records with local tax data.

Among the major cases uncovered, Corporation A reported itself as a manufacturing business eligible for startup tax exemptions and received acquisition tax reductions after constructing a building. However, the investigation revealed that the corporation was only nominally a manufacturer and was actually engaged in wholesale trade selling goods. Accordingly, the province collected an additional 20 million KRW. Wholesale trade is not eligible for startup tax exemptions.

Taxpayer B and others purchased land as self-cultivating farmers, intending to use it directly for farming and received acquisition tax exemptions. However, it was found that tenants were receiving subsidies and farming on their behalf, violating the obligation to use the land directly. The province collected a total of 50 million KRW from the related parties.

Corporation C constructed a building in a densely regulated area and paid acquisition tax at the general rate, but was later found through registration documents and local tax data to be using the building as its head office, resulting in an additional collection of 57 million KRW. The acquisition tax rate for new construction is 2.8%, but for head office construction in densely regulated areas, a 6.8% rate applies.

Corporation D, operating a business site, was found through National Health Insurance data to have failed to report resident tax for employees’ wages from 2020 to the present. The province plans to collect 27 million KRW in resident tax (employee portion). Resident tax on employees is levied on employers with 50 or more employees and a total monthly wage payment averaging 150 million KRW or more over the past year.

Ryu Young-yong, Director of the Tax Justice Division of the province, emphasized, "Gyeonggi Province and the cities and counties cooperated to establish tax law order and ensure fair taxation," adding, "We will carry out meticulous tax administration to prevent any tax evasion or omission."

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