Gwanak-gu, Realizing Trustworthy Tax Administration through Corporate Local Tax Audits

Local Tax Audits and On-Site Inspections Conducted to Protect Diligent Taxpayers and Ensure Fair Taxation
Efforts to Correct Erroneous Payments Due to Some Corporations' Lack of Local Tax Law Knowledge and Secure Omitted Amounts Underway

Gwanak-gu (Mayor Park Jun-hee) is implementing the comprehensive plan for corporate local tax audits in 2024 to protect honest taxpayers and establish a system for faithful reporting and payment, thereby realizing a trustworthy tax administration.

The district will conduct professional tax audits within a set period this year. It plans to carry out transparent and objective tax audits by reviewing the appropriateness of exemptions and reductions, and by conducting on-site investigations of high-value real estate acquisition corporations and suspected tax evasion corporations.

The main inspection items include ▲ omission of indirect acquisition costs such as changed contract amounts during building construction, financial advisory fees, and construction loan interest ▲ failure to report taxable amounts after acquiring real estate exempt from heavy taxation but left unused or sold ▲ omission of acquisition tax by major shareholders of unlisted corporations.

Every year, the district has conducted focused tax audits and field investigations on corporations subject to regular tax audits, corporations under post-management for tax exemptions and reductions, and corporations acquiring real estate exempt from heavy taxation.

Thanks to these efforts, last year the district discovered tax sources amounting to 3.27 billion KRW in local taxes, contributing to the expansion of the district’s finances.

In addition, the district will correct cases of erroneous payments.

Local income tax, which is specially collected, must be paid to the head of the local government with jurisdiction over the taxpayer’s residence. However, some corporations have paid to different jurisdictions due to lack of legal knowledge. The district plans to correct this to secure missing local taxes and thoroughly expand financial resources.

A district official stated, “For honest taxpayers, we will conduct corporation-friendly tax audits by reflecting their opinions as much as possible, such as coordinating audit schedules,” and added, “We will continue to do our best to protect honest taxpayers and realize fair taxation in Gwanak through thorough tax audits.”

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