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National Tax Service Imposed Surcharge on Mercedes-Benz Korea
Surcharge of 50 Billion Won
National Tax Service Imposed Surcharge on Mercedes-Benz Korea
  • By Jung Min-hee
  • March 30, 2016, 03:30
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The National Tax Service of South Korea imposed a surcharge of more than 50 billion won on Mercedes-Benz Korea, which sold S350 d models without any approval after a change of their transmissions.
The National Tax Service of South Korea imposed a surcharge of more than 50 billion won on Mercedes-Benz Korea, which sold S350 d models without any approval after a change of their transmissions.

 

It has been found that the National Tax Service of South Korea imposed a surcharge of more than 50 billion won on Mercedes-Benz Korea. In the meantime, the three South Korean ministries including the Ministry of Land, Infrastructure & Transport accused Mercedes-Benz Korea on March 29 of selling S350 d models without any approval after a change of their transmissions.

According to Mercedes-Benz Korea’s public announcement for last year, the National Tax Service launched a tax investigation on it in late July last year and then imposed a surcharge of 50.198 billion won. In response, Mercedes-Benz Korea asked for a review before taxation. Such a large amount is quite unusual in comparison to those the National Tax Service has imposed on foreign enterprises’ subsidiaries in South Korea. 

On March 29, the Ministry of Land, Infrastructure & Transport, the Ministry of Trade, Industry & Energy and the Ministry of Environment accused Mercedes-Benz Korea CEO Dimitris Psillakis of violating the Automobile Management Act, the Clean Air Conservation Act, the Noise and Vibration Control Act and the Energy Use Rationalization Act.

The transmissions of the S350 d, S350 d L, S350 d 4matic and S350 d 4matic L were changed to nine-speed transmissions from seven-speed on January 27 but Mercedes-Benz Korea sold 98 units of the models without reporting it to the government. The Ministry of Land, Infrastructure & Transport told the company to stop selling the vehicles on February 29 and the three ministries launched a joint investigation. Apart from the prosecution, the Ministry of Environment imposed a surcharge of 168.8 million won on the company.