Ten firms probed over wealth transfers

Korea’s tax agency said yesterday that it is investigating 10 midsized domestic companies on suspicions that they evaded taxes in transferring wealth from owners to their children through funds in tax-haven countries.

According to the National Tax Service, the companies are suspected of evading taxes in the process of transferring wealth by selling shares of their affiliates at well below their market value to the funds that were created under the scions’ names.

The companies under investigation include those in the electronics, machinery, clothing and shipping industries. Their annual sales range from 100 billion won ($86.7 million) to 500 billion won, the NTS said. Two are listed companies.

The move comes as the tax agency has been beefing up its crackdown on offshore tax evasion and illegal wealth transfer among the wealthy and those in the corporate sector.

“We are strengthening overseas information-gathering efforts for suspicious companies and conducting in-depth investigations based on the data in order to prevent wealth transfer without due tax payment,” an NTS official said.

The NTS said that it is also investigating about 40 other wealthy citizens for not informing authorities of their overseas accounts that hold 1 billion won or more.

Yonhap