European chamber mulling Korea exit

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European chamber mulling Korea exit

The European Chamber of Commerce in Korea (Eucck) said that it discussed the possibility of closing down its offices in Korea at recent board meetings after it was slapped with a fine by the National Tax Service (NTS) last month. The European nonprofit business lobby group runs one office in Seoul and another in Busan, and represents about 800 members including luxury brands like Gucci and Louis Vuitton.

“It is true that there were talks about leaving the country, but nothing has been determined yet,” an official from the Eucck said yesterday, refuting media reports that a final decision will be made this month. The Eucck also denied reports that it is in conflict with the government regarding the circulation of counterfeit products.

However, the official admitted that the idea of removing the chamber’s presence from the country was linked to a tax investigation it was subjected to from February to June.

“The [idea] came about while we were discussing ways of handling the tax fine,” he said.

The Eucck was fined 4.5 billion won ($3.9 million) last month after it fell under the watchful eye of the NTS. This marked the first time that a foreign chamber of commerce was hit by a tax probe and punished with a fine in Korea.

The NTS claimed the Eucck has been profiting from advertisements placed in a monthly publication it issues, making it legally bound to pay related taxes. The chamber insists it is not obligated to pay these as it is a nonprofit organization. Yet it said it has already handed over 1.9 billion won and is seeking ways of coming up with the remaining 2.6 billion won.

Earlier reports claimed that the chamber let go of 15 employees last month and asked its members to pay their fees for next year ahead of time to drum up funds.

The organization added it is considering filing a lawsuit to challenge the fine.

By Joo Kyung-don []
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