No Financials Means More Tax

The National Tax Service said Wednesday that small businesses that fail to attach financial statements to their income tax returns will be assessed higher taxes. Subject to the penalties will be businesses whose taxes are estimated by the tax agency based on standard models for revenues and expenses in their business category.

Small businesses in certain categories with annual sales exceeding 300 million won ($226,000) will pay 15 percent more on average in income tax this year if they do not attach balance sheets and income statements to their returns, the agency said.

Businesses affected if their sales exceed 300 million won include livestock farming, landscaping, fishing, mining, wholesale and retail merchandising and real estate sales. Manufacturing, hospitality and construction businesses must submit financial statements to avoid penalties if their sales are higher than 150 million won.