Korean Tax Authority Estimates One Third Of Companies Involved In Tax Evasion

by Mary Swire, Tax-News.com, Hong Kong

07 February 2002

A report released earlier this week by the Korean National Tax Service (NTS) has revealed that around one third of businesses in the country are suspected of having been involved in some form of tax evasion over the past three years.

According to the NTS, some 33.9%, or 94,000 of the nation's 277,200 companies have attempted to dodge corporate income taxes, or have committed some other form of tax fraud since 1998.

'We'll get tough with those trying to avoid taxes by using illegitimate methods,' an NTS official told the Korea Times, and warned of immediate tax audits and penalty taxes for repeat offenders. The NTS also intends to conduct a detailed examination of the personal use of corporate credit cards by executives, the remittance of company funds overseas, and the acquisition of property.

The report shows that the methods employed by Korea's tax dodging companies are many and varied: 56,472 firms were found to have included the personal expenses of owners or executives in their corporate expense accounts, 8,744 companies were discovered to have lowered turnover figures, and around 2,030 private educational institutes and entertainment facilities had manipulated their sales and profit figures in order to avoid tax.

Recommended