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| National Tax Service officials hold a press briefing at the agency's headquarters in Sejong, Thursday. Courtesy of National Tax Service |
By Lee Kyung-min
The country's tax authorities have begun investigating high-profile figures over suspected tax evasion.
The National Tax Service (NTS) said Thursday that it has initiated a tax audit into 74 people, including "influencers" and online platform operators. Included are 16 influencers who deliberately either underreported their earnings using overseas accounts or failed to report income from advertisers.
Their followers average 5.49 million. The most popular figure had more than 10 million followers. However, the NTS did not reveal the names of the influencers or online platform operators currently being targeted.
They are suspected of having avoided paying taxes by giving their incomes to their relatives to buy real estate and by reporting money spent to buy "supercars" as car rentals classified under business expenses, eligible for tax deductions.
In one example presented by the NTS, a man failed to register himself as a business owner subject to value-added tax, despite having employees and film sets.
The outlays he reported as necessary business expenses include: purchases of three supercars each worth hundreds of millions of won, overseas travel, luxury hotel stays and visits to high-end skincare clinics.
Seventeen unregistered lodging service providers underreported their incomes earned from users of a sharing economy platform, a highly popular service that drew visitors from all over the world amid the COVID-19 pandemic. They rented out an average of 34 small houses and up to 100 studio apartments, all of which they partially renovated into accommodation facilities.
One man, for example, rented out dozens of studio apartments without registering himself as a business owner and asked customers to send their money to a one-time-use account set up through a payment gateway (PG) in order to elude tax authorities. The man used building vacancy information gathered from experience working as a real estate broker and offered the vacant houses and studio apartments as lodging for profit. The income from these businesses was not reported.
The man bought expensive apartments and shopping malls to increase his assets and led an extravagant life, the tax agency said.
Twenty-eight lawyers and tax accountants under audit used their earlier careers as high-ranking public servants to find high-paying clients, while underreporting their incomes.
A patent firm, where attorneys who were previously high-ranking government officials worked, is suspected of tax evasion by setting up a consulting firm under the name of an employee to preserve the records of falsified tax invoices for advisory fees. This scheme was devised to reduce sales as they increased rapidly through the former public servants. The firm owner's family used corporate funds for private purposes.
The tax agency said it plans to investigate the allegations involving falsifying tax invoices and private use of corporate funds.
