Illegal Wealth Transfer Targeted
The National Tax Service (NTS) has started a tax investigation into large businesses and rich people just two days after President Moon Jae-in called for combating offshore tax evasion.
The NTS announced on May 16 that it has launched a tax probe into 50 large businesses and rich people that are suspected of stashing wealth overseas or transferring wealth to children in an expedient way.
The NTS said it would investigate allegations of illegal provision of support to children’s companies, illegal use of corporate funds, expedient transfer of property to children using borrowed names, irregular capital transactions and diverting company funds for private purposes.
The NTX also uncovered cases of conglomerates’ family members handing over entrusted shares of companies established in tax havens to their children at low prices or using corporate cards for a personal use.
Thirty conglomerates with sales of 100 billion won (US$92.81 million) are subject to investigation. Kim Hyun-joon, head of investigation department at the NTS, said, “The top 100 companies which are well-known are on the list. The amount of suspected tax evasions is from billions of won up to some 100 billion won.”
With the Moon Jae-in administration making efforts to clean up deep-rooted evils, tax investigations will continue for a while. President Moon said on May 14, “Tax evasion by illegally flying and hiding assets abroad is a typical antisocial behavior.” The NTS investigated 1,307 tax evasion cases of large businesses and rich people last year and imposed 2.81 trillion won (US$2.61 billion) of fines.