Gyeonggi Province Conducts Tax Investigation on 93 Corporations Acquiring High-Value Real Estate...Collects 41.3 Billion Won in Acquisition Tax

[Suwon Ilbo=Reporter Park No-hun] Corporations that acquired high-value real estate and then under-reported the acquisition amount or illegally omitted taxes by selling properties after receiving local tax reductions have been detected by Gyeonggi Province's tax investigation.

Gyeonggi Province announced on the 3rd that it conducted local tax investigations on 93 corporations in the province that acquired high-value real estate over the past year, detected 82 corporations in violation of relevant laws through under-reporting, illegal tax reductions, and non-reporting, and collected approximately 41.3 billion won.

Investigation targets were corporations that either acquired real estate valued at 5 billion won or more or received local tax reductions of 100 million won or more, requested by cities and counties for investigation. The province conducted tax investigations primarily through written documents, taking into account the COVID-19 situation, and conducted on-site investigations only when necessary.

Violations included ▲61 cases of local tax under-reporting ▲9 cases of illegal tax reduction ▲10 cases of non-reporting ▲2 cases of omitted surcharge tax.

In an example of detected violations, Corporation 'A,' which served as the operator of a large-scale land development project, found that public roads, parks, and other social infrastructure state-owned land within the project area were transferred to the corporation without compensation according to relevant laws. Corporation 'A' mistakenly treated this as acquisition tax exemption and failed to report acquisition tax, resulting in 12.2 billion won in collection.

Corporation 'B,' which operates a golf course, newly constructed a condominium within the golf course and leased it as lodging facilities. However, it was detected that some lodging facilities were used as private residences for employees of individuals or corporations, and a surcharge tax rate was applied, resulting in 2.4 billion won in acquisition tax collection.

Corporation 'C,' which operates manufacturing, received subdivision of land in an industrial complex and received local tax reductions after constructing a new factory. However, it was detected that during the period of direct use, the land and factory were sold to related companies, resulting in the collection of 1.5 billion won in acquisition tax and property tax reductions.

Additionally, 8 reconstruction cooperatives and housing cooperatives with high possibility of local tax reporting omissions and errors collected 2.3 billion won, and 3 corporations exploiting 'dormant corporations' to evade acquisition tax surcharge collected 200 million won through special tax investigations.

Choi Won-sam, head of the Gyeonggi Province Tax Justice Division, said, "The number of high-value real estate acquisition investigation cases is expected to steadily increase due to large-scale land development projects, housing construction projects, and reconstruction and redevelopment," and added, "We will make greater efforts to realize 'tax justice' through thorough tax investigations to ensure no tax sources are omitted."