"As They Please"... 42% of High-Priced Corporate Homes Used as "Emperor Residences"

[Anchor]

It has been found that more than 4 out of 10 high-end residences registered under corporate names were used for the personal purposes of company owners. The National Tax Service has announced plans for intense tax audits into these so-called emperor residences.

Reporter Chae Heesun has the details.

[Reporter]

This is a luxury apartment complex in Yongsan-gu, Seoul.

A small-to-medium-sized enterprise owns an apartment here under a corporate name. However, an inspection by the National Tax Service revealed that the actual residents were not employees, but the married couple of the owner's children.

National Tax Service Commissioner Lim Kwang-hyun disclosed the results of a full inspection on approximately 2,600 high-priced corporate housing units with an official appraised value of 900 million won or more via social media.

Excluding rental units and employee dormitories, 1,097 units—accounting for 42% of the total—were found to have been used for the personal purposes of company owners.

The inspected homes had an average official appraised value exceeding 2 billion won, with 12 units valued at over 10 billion won, and the most expensive one exceeding 20 billion won.

The companies caught in this crackdown ranged in size from small-and-medium enterprises to large conglomerates.

Under current tax laws, maintenance and management expenses for company housing used by executive shareholders or their relatives cannot be processed as corporate expenses.

Even so, irregular free residency has become a common practice in some industry sectors. Commissioner Lim pointed out that while some companies provided ultra-luxury apartments with Han River views or located in Gangnam and Yongsan as private residences for owners or their children, they kept it as an open secret from regular employees.

[National Tax Service Official : Because the children didn't pay (rent due to free usage), they have to pay income tax on that equivalent amount. Corporate taxes also increase accordingly. This is because if it weren't for the related party (the child), the corporation would have earned 10 million won a month in (rent). It connects not just to expenses, but to revenue as well.]

During this inspection process, cases were also confirmed where owners transferred high-priced homes to corporations to evade regulations on multi-home owners, or secured luxury condos worth over 10 billion won under corporate names for private use.

The National Tax Service plans to conduct strict tax audits on corporations with confirmed violations and expand its verification to cover the private use of corporate funds as a whole.

(Camera Journalist: Lee Jae-young | Video Editing: Ahn Yeo-jin | Design: Hwang Se-yeon)
※ Please note: This article was translated by AI and may contain errors.