Gyeonggi-do Recovers 76.1 Billion KRW Through Tax Audits of 564 Corporations Last Year

Gyeonggi Provincial Government

Gyeonggi Province collected a total of 76.1 billion KRW through corporate tax audits conducted last year.

On the 23rd, Gyeonggi Province announced that it had collected a total of 76.1 billion KRW from 564 corporations that evaded local taxes by underreporting real estate acquisition prices or deliberately avoiding acquisition tax surcharges.

Gyeonggi Province conducts regular tax audits annually on 90 corporations selected through the deliberation of the Local Tax Deliberation Committee. In parallel, it also conducts irregular audits on corporations suspected of local tax evasion.

First, Gyeonggi Province conducted regular tax audits targeting corporations that acquired real estate worth 5 billion KRW or more or received local tax reductions of 100 million KRW or more, collecting a total of 28 billion KRW from 90 corporations. Additionally, through a full-scale investigation of corporations evading acquisition tax surcharges in metropolitan areas, it collected 48.1 billion KRW in taxes.

By tax category, acquisition tax accounted for 20.5 billion KRW, representing 73.1% of the total. This was followed by local income tax at 2.5 billion KRW (9.1%) and local education tax at 2.1 billion KRW (7.4%).

By type of collection, underreporting accounted for 16.4 billion KRW (58.7%), surcharge evasion 9.4 billion KRW (33.7%), improper reductions 1.4 billion KRW (4.8%), and non-reporting 700 million KRW (2.8%).

Major collection cases include School Corporation A, which applied for an acquisition tax exemption for schools and foreign educational institutions after acquiring real estate and received local tax reductions. However, since part of the area was not directly used for the intended purposes such as restaurants, Gyeonggi Province reclaimed the exempted acquisition tax from the corporation.

Corporation B acquired a building and installed artworks under the “Cultural Arts Promotion Act.” In this case, the cost of purchasing art decorations should be included in the building’s taxable base for acquisition tax reporting, but this was omitted, leading Gyeonggi Province to collect additional acquisition tax and other taxes.

Corporation C, while performing corporate accounting and other tasks at an affiliated company located in a metropolitan area, falsely established its head office corporation at an acquaintance’s office located outside the metropolitan area. The corporation acquired real estate within the metropolitan area, which is subject to acquisition tax surcharges, but failed to report and pay the surcharge, resulting in local tax collection.

No Seung-ho, Director of the Tax Justice Division of Gyeonggi Province, stated, "We will do our best to realize tax justice by conducting thorough tax audits without any gaps to prevent tax base evasion and ensure no tax base is omitted."

Gyeonggi Province plans to actively collect taxes when false exemption applications or acquisition tax reporting omissions are discovered, while also conducting business-friendly tax audits by deferring audits for small and sincere enterprises.

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