2,272 Tax Violation Cases Detected, Including Unreported and Underreported Taxes...3 Billion Won Collected

[Suwon Ilbo=Park No-hun Reporter] Gyeonggi Province announced on the 3rd that it conducted joint local tax audits with four cities including Gunpo, Yongin, Osan, and Anseong from February to June, detecting 2,272 cases of tax omission and collecting 3 billion won in back taxes.

By category: ▲1,266 cases of unreported registration and license tax ▲619 cases of unreported acquisition tax on temporary buildings, inheritance, and other cases with tax rate errors ▲218 cases of real estate acquisition tax exemption waiver period misuse or non-use ▲167 cases of unreported resident tax ▲2 cases of luxury residential property acquisition tax underreporting using regular tax rate instead of higher rate, etc.

In a specific case, Mr. A and others residing in Osan failed to report not only registration and license tax for development permits but also registration and license tax for agricultural land conversion, leaving taxes unpaid, resulting in 2 million won in back taxes collected in this audit.

B Corporation in Osan purchased real estate with the intention of using it for startup small business operations and received acquisition tax exemption. However, it failed to observe the exemption waiver period and used the property for other purposes, including leasing to another corporation for two years from the initial use date, resulting in an additional 31 million won in tax collection.

Mr. C residing in Anseong reported a lower acquisition tax when building a new house. The new house qualified as a luxury residential property subject to higher acquisition tax rates, but was reported at the regular rate, resulting in underreported taxes. After detection, the province collected an additional 110 million won. The acquisition tax rate for general housing is 2.8%, while luxury housing is subject to 10.8%.

Mr. D and others residing in Gunpo registered as rental business operators and acquired real estate under the name of rental but used it as their own residence. After detection, they were ordered to pay back taxes of 195 million won.

Mr. E and others residing in Yongin built and lived in a house without use approval. After detection in this audit, they reported and paid 13 million won in acquisition tax.

According to the ‘Local Tax Basic Law,’ if a taxpayer fails to report the tax base by the statutory reporting deadline, a non-reporting surcharge of up to 20% of the tax payable is imposed. If a taxpayer fails to pay local taxes by the payment deadline or pays less than the required amount, an additional surcharge of 0.025% per day of delayed payment is imposed.

Choi Won-sam, head of the Tax Justice Division of Gyeonggi Province, said, “To establish a fair tax system, Gyeonggi Province and cities and counties will work together to implement tax administration strictly in accordance with law and principles.”

Meanwhile, through joint local tax audits with cities and counties, the province discovered and collected a total of approximately 29.1 billion won in unpaid taxes over the past three years. In the second half, the province plans to continue joint audits on all local taxes in cooperation with five cities and counties including Suwon.