South Korea’s National Tax Service (NTS) has launched an investigation on 50 family-run business conglomerates and individuals suspected of illicit tunneling, money transfer and placements to save in inheritance taxes.
The tax agency said Wednesday that it is investigating family owners of large companies whose annual sales exceed 100 billion won ($92.7 million) on charges of inheriting wealth by using irregular means.
“Some family owners of large companies are under suspicion of having employed illicit means to hand down management right or wealth to their children in the process of business succession to the next generation,” said Kim Hyun-joon, head of NTS’ investigational department. They are suspected of placing business orders to companies owned by their children, creating stash money through companies managed by relatives or acquaintances, transferring wealth through shareholding under borrowed names or suspicious business spinoff and merger.
The NTS is closely working with Fair Trade Commission and Financial Services Commission to root out owner families’ illegal business succession or misappropriation of corporate money.
“We will crack down on tax avoiding activities of owners of large companies to prevent them from handing down wealth without paying their dues,” said an official from the NTS. Last year, the tax agency imposed the largest-ever penalties of 2.8 trillion won on business owners for dodging taxes, up 54 percent compared to 2012 when it had fined 1.8 trillion won.
By Sohn Il-seon and Choi Mira
[ⓒ Pulse by Maeil Business News Korea & mk.co.kr, All rights reserved]