'Investors Disguised as Business Operators to Obtain Acquisition Tax Reduction'... Gyeonggi-do Files Charges Against Founders of Knowledge Industry Centers

Gyeonggi Provincial Government

Gyeonggi Province has reported to the prosecution a company that established a knowledge industry center and its representative for improperly receiving a tax reduction of over 500 million KRW in acquisition tax by selling units intended for business operators to general investors.

According to the current "Act on the Promotion of Industrial Cluster and Factory Establishment," the founder of a knowledge industry center must recruit business operators who will directly engage in the target industries as tenants, and the Local Tax Special Cases Act provides a local tax reduction system to support such founders.

The knowledge industry center establishment company caught this time promoted to the general public that the center offers stable rental income, tax benefits, and high loan limits, making it possible to invest with a small amount, thereby inducing sales contracts.

The company sold 393 units to 222 general individuals and falsely reported these as sales for business facilities, thereby unjustly receiving an acquisition tax reduction of over 500 million KRW. The total sales amount received from the 222 individuals was over 60 billion KRW.

Specifically, Mr. A (70) visited the sales office guided by a street promoter and, upon hearing that he could receive monthly rent and would not burden his children in old age, paid the deposit on the spot.

Mrs. B, a full-time housewife, was persistently contacted by a sales staff who said the company-held units were on a first-come, first-served basis, and she contracted 8 units of the knowledge industry center together with her younger sister. Most of the sales staff working at the sales promotion center were young people who applied thinking it was a general office job after seeing recruitment ads from the sales agency. It was confirmed that the company sold 24 units to 17 sales staff members.

For those who purchased units in this way, the company acted as an agent for business registration or guided them to register business names and industries, and at the time of move-in, installed office equipment through an interior company selected by the company to make it appear as if they had actually moved in.

Currently, most of the units in the knowledge industry center are vacant. While the buyers suffer from monthly management fees and loan interest burdens, the establishment company has already distributed profits and been liquidated.

Gyeonggi Province plans to designate the liquidator as the secondary taxpayer to recover the local taxes improperly reduced by the company. If the corporation is liquidated and dissolved, the liquidator and those who received liquidation proceeds can be designated as taxpayers for collection.

Ryu Young-yong, Director of the Tax Justice Division of Gyeonggi Province, emphasized, "This result was obtained through active investigation of local tax violation cases to detect tax evasion, and we will continue to respond strictly to tax evasion activities."

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