Samsung’s Lee may owe tax on bank accounts

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Samsung’s Lee may owe tax on bank accounts

Korea’s financial authorities may send bedridden Samsung Chairman Lee Kun-hee a large tax bill for bank accounts he controls under other people’s names.

During a final round of a parliamentary audit of the Financial Services Commission and Financial Supervisory Service on Monday, Rep. Park Yong-jin of the governing Democratic Party asked Choi Jong-ku, the chairman of the FTC, the top financial regulator of Korea, whether the government should collect tax on accounts that have been confirmed by law enforcement as being controlled by a person in the names of other people.

Current law stipulates that 90 percent income tax should be imposed on any “income from interests and dividends” accrued from financial assets under so-called “non-real names.”

Choi said he agreed, which means the commission will consider the accounts of a person that exist under others’ names as “non-real name” accounts if they are confirmed by authorities such as prosecutors or the Financial Supervisory Service.

Lee, the father of Samsung Electronics’ vice chairman Lee Jae-yong who is currently behind bars for his involvement in the bribery case that brought down former President Park Geun-hye, may have as much as 4.4 trillion won ($3.92 billion) in financial assets under other names.

Depending on the decision by the financial authorities and the National Tax Service, Chairman Lee may have to cough up 100 billion won or more in tax.

The controversial accounts were brought into the limelight by Rep. Park earlier this month, nearly a decade after prosecutors indicted Lee in 2008 for setting up over 1,000 accounts under different names to evade taxes. Rep. Park said Chairman Lee did not put the problematic accounts that were discovered by the prosecutors in his name, avoiding taxes and fines. Samsung, however, said that the amount that Lee promised to reimburse the government nine years ago has been fully paid.

“We will work with the Financial Supervisory Service to inspect the withdrawal, closing and conversion activities on the accounts again,” said Choi.

Choi said, however, that the problematic accounts are not subject to fines, as the names on the accounts have been confirmed as not fake.

Choi also re-iterated that the commission has never provided any help to Samsung, nor has it provided any guideline related to these accounts.

During the audit session, Choe Heung-sik, the new governor of the Financial Supervisory Service, was grilled by the lawmakers over a charge that children and relatives of top officials of the agency may have received special treatment from Woori Bank during the employment recruiting last year, an allegation raised by Rep. Sim Sang-jeung of the progressive Justice Party earlier this month. After the allegation came to the surface, the Financial Supervisory Service said it requested the bank to conduct an investigation of its own.

“We have notified the prosecutors immediately after we received the result of the probe,” Choe said, who added that the agency will launch an industry-wide investigation.

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