NTS expands targets of its real estate tax investigationsThe National Tax Service (NTS) will expand its investigation of real estate tax evasion by high-income individuals, loan sharks and hagwon (private academy) owners.
“We will be stepping up collection of information on tax evasion made in the process of real estate transactions while conducting a swift investigation on any suspicions of tax evasion, including illegal inheritance of payment to acquire apartments or ‘down contracts [lowering the reported price of an apartment in an effort to avoid higher taxes],” said Han Seung-hee, the National Tax Service commissioner, during its annual audit by the National Assembly on Wednesday. “We will also step up our investigation of intentional tax evasion committed by those closely related to the lives of middle- and lower-income people, such as loan sharks and expensive hagwon [owners].”
The tax agency commissioner also said his organization will focus its investigation on offshore tax evasion, which is becoming more sophisticated. Such efforts include expansion in financial information exchanges with other countries’ financial authorities and raising fines.
“We will focus our investigation power and act rigorously against those that try to hide their income or properties overseas using tax havens, offshore accounts and overseas branches,” said Han. “We will expand our information exchange while working with [local] related institutions such as the Bank of Korea, the Financial Supervisory Service and the Korea Customs Service in strengthening joint moves to counteract it.”
He said the NTS will also be intensifying its investigation of possible violation of the tax code committed by conglomerates using nonprofit affiliates to conduct illegal inheritance. He also said that the tax agency will continuously monitor change in properties owned by the exceptionally rich so that they won’t be able to give their wealth illegally to children or grandchildren.
It also plans to increase its support on small businesses, including exclusions from tax audits and small tax write-offs if they meet requirements under the law. At the hearing, the commissioner hinted at the possibility of reporting the corporate tax evasion allegedly committed by former President Lee Myung-bak.
“We cannot disclose the cases of certain taxpayers,” Han said. “We will act according to the law and principle.”
His comment was a response to claims by Democratic Party lawmaker Park Young-sun during the annual audit that the tax agency underreported the amount of taxes that Lee dodged.
BY LEE HO-JEONG [firstname.lastname@example.org]