Gyeonggi Province to Conduct Full Investigation of 37 Suspected Agricultural Corporations Evading Local Taxes by End of Next Month
Suwon NewsPublished 2020.05.29 05:59
Abuse of local tax reduction system for agricultural real estate acquisition and sale15 investigations completed by the 28th, full collection of 21 million won in unpaid taxes from 2 corporationsFull investigation to be completed by end of next month followed by strong disciplinary action
[Suwon Ilbo=Park No-hun] Gyeonggi Province announced on the 29th that it is investigating violation cases of 37 agricultural corporations suspected of abusing the current system that provides acquisition tax exemptions for agricultural real estate by receiving tax reductions and then reselling the property without adhering to the mandatory use period to gain illicit profits.
Previously, Gyeonggi Province conducted a comprehensive survey in February on a total of 27,493 agricultural corporations in the province regarding acquisition tax exemption status over the past five years. As a result, 184 corporations that received acquisition tax exemptions but sold land without observing the mandatory three-year use period were discovered. Among these, 37 corporations suspected of local tax evasion are the subject of this investigation.
Considering the COVID-19 situation, the Province is conducting written investigations on the relevant corporations. By May 28th, 15 investigations have been completed, and the full amount of 21 million won in local tax arrears was collected from 2 corporations where violations were detected.
According to detected cases, A Livestock Cooperative located in Gangwon Province was established in 2011 with the purpose of cultivating wild ginseng. Later, in 2015, when it acquired forest land in Pyeongtaek, Gyeonggi Province, it evaded taxes by reselling the forest land in the same year despite being required to maintain a three-year mandatory use period. The violation was discovered in this investigation and the corporation paid the full unpaid tax amount of approximately 10 million won.
B Agricultural Corporation located in Yangpyeong was established in 2015 and received acquisition tax exemption when acquiring farmland for the purpose of sprouting cultivation. Subsequently, it sold some equity in the same year, and only after the investigation into local tax evasion commenced did it pay the unpaid tax amount of approximately 10 million won.
If local tax evasion suspicion is found, it shall be subject to ‘imprisonment of two years or less or a fine’ in accordance with Article 102 of the ‘Local Tax Basic Law’.
Lee Ui-hwan, Director of Tax Justice at Gyeonggi Province, stated, “This investigation is the first by a metropolitan local government to investigate agricultural corporations that evade local taxes by abusing the ‘Local Tax Special Case Restriction Act’,” and added, “Through this comprehensive investigation scheduled to be completed by the end of June, we will thoroughly investigate defaulting corporations and implement strong disciplinary action to realize fair tax justice.”
Considering the COVID-19 situation, the Province is conducting written investigations on the relevant corporations. By May 28th, 15 investigations have been completed, and the full amount of 21 million won in local tax arrears was collected from 2 corporations where violations were detected.
According to detected cases, A Livestock Cooperative located in Gangwon Province was established in 2011 with the purpose of cultivating wild ginseng. Later, in 2015, when it acquired forest land in Pyeongtaek, Gyeonggi Province, it evaded taxes by reselling the forest land in the same year despite being required to maintain a three-year mandatory use period. The violation was discovered in this investigation and the corporation paid the full unpaid tax amount of approximately 10 million won.
B Agricultural Corporation located in Yangpyeong was established in 2015 and received acquisition tax exemption when acquiring farmland for the purpose of sprouting cultivation. Subsequently, it sold some equity in the same year, and only after the investigation into local tax evasion commenced did it pay the unpaid tax amount of approximately 10 million won.
If local tax evasion suspicion is found, it shall be subject to ‘imprisonment of two years or less or a fine’ in accordance with Article 102 of the ‘Local Tax Basic Law’.
Lee Ui-hwan, Director of Tax Justice at Gyeonggi Province, stated, “This investigation is the first by a metropolitan local government to investigate agricultural corporations that evade local taxes by abusing the ‘Local Tax Special Case Restriction Act’,” and added, “Through this comprehensive investigation scheduled to be completed by the end of June, we will thoroughly investigate defaulting corporations and implement strong disciplinary action to realize fair tax justice.”
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