Eucck votes to pack bags

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Eucck votes to pack bags

The European Chamber of Commerce in Korea (Eucck) has decided to close down its offices in Korea following a dispute over a fine by the National Tax Service (NTS) that it considers unreasonable.

Jean-Luc Valerio, the chairman of the European business body, and 100 members joined a general meeting at the Grand Hyatt Hotel in Seoul on Thursday and voted to dissolve the Eucck after a vote, it said yesterday.

“Members were assembled to discuss future management plans regarding a 4.5 billion won [$3.9 million] tax fine from the local tax authority,” an official from the Eucck was quoted as saying. “After discussions and a vote, we decided to shut down.”

The specific date of the official shutdown has yet to be revealed. The Eucck currently runs one office in Seoul and another in Busan, and represents about 800 members, including luxury brands like Gucci.

The action came nearly three months after the NTS notified the group that it must pay 2.6 billion won in taxes and 1.9 billion in fines. The NTS conducted a tax probe from February to early June.

It was the first time that a foreign chamber of commerce has been subjected to such a probe and fine here.

The chamber insisted it is not obligated to pay as it is a nonprofit organization, and that it used its advertising revenue to fund a magazine it provides for free to its members. However, the NTS claimed that even a nonprofit organization has to pay taxes, according to the law, when it starts to turn a profit.

The Eucck was listed as “the foreigners’ group” when it was established in Korea in 1986, but after a legal revision in 1999 it became an entity without a clear legal identity.

“Because of the ‘ambiguous status,’ there were difficulties in the way our accounts were treated,” a member of the Eucck said. “We decided the group cannot continue under such conditions.”

The business group said it has paid the fine in full but not any of the demanded taxes as it must first be liquidated to free up the necessary cash. Earlier reports claimed it let go of 15 employees and asked its members to pay their fees for next year ahead of time.

By Park Hyun-young, Joo Kyung-don []

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