Gyeonggi-do Auctions Ghost Cars of Closed Corporations with Local Tax Arrears... Corporations and Representatives Reported

Gyeonggi Provincial Government

Gyeonggi Province conducted a violation investigation targeting two closed corporations owning 36 suspected ghost vehicles, filed charges against one corporation and its representative with the prosecution, and proceeded with forced public auctions for eight ghost vehicles.

Unlike general tax audits aimed at tax collection, violation investigations are judicial in nature, conducted to report clear legal violations such as tax evasion and asset concealment to investigative agencies for the purpose of applying penalties such as fines or imprisonment.

To enhance fairness in tax burden, Gyeonggi Province is the only local government nationwide to have established a dedicated violation investigation team and conducts annual investigations into violations.

From August to December last year, Gyeonggi Province, in cooperation with city and county governments, conducted violation investigations on 36 vehicles owned by two closed corporations with tax delinquencies. These vehicles were suspected ghost vehicles as they were operated by third parties after subscribing to compulsory liability insurance and illegally rented out. The delinquent automobile tax and other arrears of the closed corporations amounted to 294 million KRW.

The investigation revealed that Mr. A, the representative of one of the two delinquent corporations, closed the corporation to avoid enforcement of delinquency measures such as license plate seizure and forced public auction by the tax authorities, concealed the corporation-owned vehicles, and illegally distributed them to third parties. Gyeonggi Province filed charges against the corporation and Mr. A with the prosecution.

Regarding Mr. B and others occupying the ghost vehicles, an investigation into whether acquisition tax evasion occurred through actual acquisition found that the statute of limitations (five years) had passed, so punishment was not possible. However, by requesting consent for public auction, eight ghost vehicles were pushed for auction, collecting about 5 million KRW in delinquent local taxes.

Gyeonggi Province plans to confirm the whereabouts of the remaining 28 vehicles and proceed with auctions.

Vehicles owned by corporations should have ownership transferred through normal liquidation procedures (auction) when the corporation is dissolved, but due to tax delinquencies, abnormal transactions occur, allowing third parties to possess and operate the vehicles, turning them into ghost vehicles.

Ghost vehicles are exploited as lawless vehicles because it is difficult to identify the actual possessor, and are misused to evade legal responsibilities such as uninsured traffic accidents, vehicle inspections, speeding violations, and other tax evasions.

Ryu Young-yong, Director of the Tax Justice Division of Gyeonggi Province, stated, "Ghost vehicles, which can be called bombs on the road, are a social evil that must be eradicated. We will strongly punish through violation investigations," and added, "We will do our best to prevent crimes and traffic law violations involving ghost vehicles in advance."

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