▲ National Tax Service
The National Tax Service (NTS) announced today (July 12) that it has collected 319.5 billion won in taxes from 114 companies following an investigation into tax evasion practices that exploit inflation to generate unfair profits.
The NTS conducted tax audits on 117 companies that had been profiteering through excessive price hikes while failing to properly report their income, carrying out the investigations in four phases starting in September of last year.
The top 10 companies in terms of tax collection accounted for 248 billion won, representing approximately 78% of the total amount collected.
The category with the highest amount of tax collected involved companies that abused their dominant market position, such as monopolies or oligopolies, with 9 companies being assessed 180.9 billion won. Eleven cases were referred for criminal prosecution.
Company A, a general food manufacturer, used its dominant position in an oligopolistic market to raise product prices by approximately 5%.
The investigation revealed that the company paid about 20 billion won in entertainment-related sales incentives to distributors to maintain business relationships and disguised these payments as logistics costs in its accounting. It was also found to have funneled approximately 15 billion won in profits to a related entity through methods such as overpaying for outsourced services. The company was assessed approximately 20 billion won in taxes.
The NTS collected 9.8 billion won from 10 companies involved in price and bidding collusion.
Company B, an electronic components manufacturer, had previously been fined by the Korea Fair Trade Commission for bid-rigging in public procurement. A subsequent NTS investigation uncovered tax evasion, leading to an additional 4 billion won in taxes being collected. The company was found to have paid hundreds of millions of won in commissions to other firms related to the bid-rigging and recorded these as business expenses.
Furthermore, the company improperly claimed about 8 billion won in labor costs for non-research staff as research and development tax credits, and the owner's family used corporate credit cards for personal expenses at golf courses, department stores, and entertainment venues.
The NTS audited 29 unfair franchise headquarters and collected 35.9 billion won.
Company C, a large food and beverage franchise headquarters, engaged in shrinkflation, effectively raising prices by reducing product sizes instead of increasing the sticker price. The NTS investigation found that the company funneled about 2 billion won in profits to a related entity by purchasing raw materials at inflated prices and improperly provided 1 billion won to an overseas subsidiary through advertising fees. The NTS collected approximately 20 billion won from the company for these and other tax evasion charges.
Seventeen wedding and funeral service companies were also investigated, resulting in 14 billion won in taxes collected.
Company D, a mutual aid service provider, raised prices by launching new products similar to existing ones while discontinuing the old ones. This practice caught the attention of the NTS, leading to a tax collection of approximately 5 billion won. The investigation revealed that the company unfairly supported its affiliates by overpaying about 3 billion won in shared expenses, such as labor costs for employees working on joint tasks and promotional expenses. It also paid hundreds of millions of won in salaries and overseas travel expenses to the owner's children, who did not actually work for the company. Additionally, the company covered hundreds of millions of won in personal expenses for a housekeeper hired by the owner, recording them as corporate expenses.
The NTS collected 58.5 billion won from 15 companies involved in illegal foreign currency outflows and the improper use of tariff quotas.
Company E, a food and beverage manufacturer, was found to have imported raw materials using companies under the names of retired employees to bypass volume limits and receive tariff quota benefits, while also receiving false tax invoices. The company was assessed 7 billion won in taxes.
The NTS stated, "Through continuous monitoring, we will immediately select for investigation any companies confirmed to be evading taxes while excessively raising prices under the pretext of economic conditions." The agency added, "We plan to use all available means to conduct thorough verifications during audits and will ensure that those found to have committed tax crimes, such as tax evasion or the issuance of false tax invoices, are punished in accordance with the Punishment of Tax Evaders Act."
(Photo: Yonhap News)
※
Copying, redistribution, and unauthorized use in AI training are strictly prohibited.