For Alleged Offshore Tax Evasion
The National Tax Service (NTS) of Korea has reportedly launched a large-scale tax investigation into Intel Korea.
The NTS announced on Feb. 22 that it has launched an intensive tax investigation into a multinational corporation after detecting tax evasion allegations. The announced coincided with the tax authority's launch of a tax probe into Intel Korea.
The NTS reportedly dispatched officials from the International Transaction Investigation Bureau of the Seoul Regional Tax Office to Intel Korea late February.
The tax office said at the time that it investigated multinational corporations engaged in booming businesses, including semiconductors, logistics and equipment, which were suspected of evading taxes by disguising its offices as fake liaison offices or concealing their permanent establishments in Korea.
Intel Korea is generating sales in Korea, but pays its corporate taxes to the United States. If a foreign company has no permanent establishment in Korea or only provides simple business support services here, it has no obligation to file its corporate tax in Korea. However, the National Tax Service believes that Intel Korea is operating as a practically ‘permanent establishment,' performing customer management, sales, after-sales services and risk management according to the instructions of its U.S. headquarters.