National Tax Service to Intensively Inspect 'Underreported Sales from High-Price Oil Sales' amid Rising Oil Prices... "Tax Audits for Detected Evasion"

On-Site Inspections of Suspected Businesses Begin on March 10

With the recent sharp rise in oil prices leading to increased energy costs for the public, the National Tax Service has decided to conduct nationwide on-site inspections and tax audits targeting businesses suspected of illegal oil distribution, such as manufacturing fake oil and trading without proper documentation.

On March 10, the National Tax Service announced that it would mobilize 300 personnel from seven regional tax offices and 133 local tax offices across the country to carry out focused, on-site inspections.

Specifically, the inspections will focus on undocumented, disguised, and fabricated transactions involving petroleum products, as well as cases of underreporting sales after selling at high prices and other noncompliant reporting practices. In addition, the agency will investigate the production and distribution of fake oil and the improper diversion of tax-free oil, which tend to occur during periods of high oil prices. If tax evasion is detected during these inspections, the National Tax Service plans to immediately launch formal tax investigations and respond strictly.

To ensure effectiveness, some of these on-site inspections will be conducted jointly with the Korea Petroleum Quality & Distribution Authority. The combination of the National Tax Service's tax infrastructure and the Korea Petroleum Quality & Distribution Authority's expertise in petroleum products is expected to produce a synergy effect, leading to the detection of a significant number of cases where fake oil is used to exploit consumer concerns.

In addition, the National Tax Service will actively participate in special inspections by the Korea Petroleum Quality & Distribution Authority, as well as the "Inter-Ministerial Petroleum Market Inspection Team," as part of a government-wide effort to strengthen oil market oversight. The agency plans to thoroughly examine illegal activities and tax evasion throughout the entire distribution process.

Businesses found to have abnormal trading structures, manipulated ledgers, or false supply and demand reports during inspections will be subject to tax audits to rigorously verify any tax evasion. For repeat offenders, the National Tax Service will continuously monitor their trading structures and tax reporting status.

The National Tax Service is also making advance preparations to ensure that inventory checks at oil refiners and related businesses can be conducted in a timely manner, in anticipation of possible price ceiling designations, reductions in oil tax rates, and announcements regarding hoarding. The agency plans to issue guidance to related businesses, urging them to maintain appropriate shipment and inventory levels.

An official from the National Tax Service stated, "The National Tax Service will continue to conduct on-site inspections, tax audits, and joint inspections with relevant ministries to address actions that exploit high oil prices to increase consumer burdens and disrupt market order, thereby contributing to the stability of people's lives and the creation of a fair market environment."

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