Business owners undergo investigation from NTS for tax evasion

May 28, 2026, 01:51 pm

The National Tax Service (NTS) announced on May 28 that it has launched an intensive tax audit targeting 19 corporations heavily suspected of misappropriating corporate funds for personal use and engaging in illicit gift tax evasion. These entities collectively own 90 high-end luxury vehicles valued at approximately 30 billion KRW, and the total amount of suspected tax evasion reaches 300 billion KRW.

This particular tax audit was triggered by an anger-filled exposé posted by a young job seeker on a corporate review board, which recently took the internet by storm. The post lamented, "While employees have their salaries frozen for years at a minimum wage akin to part-time pay, the CEO decks himself out in luxury brands using corporate cards, drives sports cars, and flaunts his wealth," inducing a profound sense of frustration among job candidates.

To curb anomalous tax evasion utilizing high-end corporate vehicles, the government mandated specialized employee-only insurance policies in 2016, and starting this year, required corporate vehicles valued at 80 million KRW or more to display a distinctive light green license plate. This institutional mechanism was designed to leverage a so-called "stigma effect."

However, the efficacy proved short-lived. An erroneous perception spread among certain wealthy individuals that the green license plate had actually become a "true status symbol of wealth," leading to a rebound in luxury vehicle purchases. In fact, the number of corporate-registered vehicles valued at 100 million KRW or more had dipped to 33,960 units last year just before the system's introduction, but surged back to 39,429 units this year. To evade the 80 million KRW threshold for the green license plate, these individuals resorted to under-the-table tactics, drawing up fraudulent "understated contracts" to artificially deflate and report lower purchase prices.

The audited owners and their families registered ultra-luxury supercars as business assets but utilized them for private purposes, with their children driving them to entertainment bars, nightclubs, golf courses, and luxury hotels. They went as far as systematically falsifying vehicle logs to mask this personal usage.

One business owner under investigation acquired three high-end supercars worth a combined 800 million KRW under the corporate name, letting his entire family operate them as personal vehicles. Furthermore, they continuously purchased high-end luxury goods—including artwork, designer clothing, and jewelry—along with department store gift certificates using corporate credit cards. Even the hundreds of millions of KRW in interior remodeling costs and imported furniture expenses for the owner's private luxury residence were billed to corporate funds.

Corporate funds were also wrongfully funneled out by inserting children's companies into transaction pipelines to collect "transaction tolls" or by paying fictitious labor costs to build up financial resources for the offspring.

Another owner purchased over 40 high-end foreign cars under the corporate name to provide them free of charge to executives, their spouses, and children, while also extending an interest-free loan of approximately 20 billion KRW for purchasing virtual asset mining rigs to distribute profits. The children, who subsequently accumulated massive wealth by mining virtual assets with these rigs, failed to report approximately 17 billion KRW held in overseas financial accounts.

Through this investigation, the NTS intends to completely eradicate not only the private use of luxury vehicles but also the malicious tax evasion practices of corporations that dodge their fair share of taxes through expedient means.

During the audit process, the tax authority plans to deploy every available mechanism—including temporary asset freezes, financial account tracking, and digital forensics—to thoroughly scrutinize the entire wealth accumulation process of the owners' families. In particular, if it is confirmed that nominee accounts were used to omit sales or that documentation was intentionally fabricated, the NTS will take stern measures, including filing criminal complaints in accordance with the Punishment of Tax Offenses Act.

"If the distorted perceptions and illegal practices of these corporations are left unchecked, it can inflict a deep sense of deprivation upon the vast majority of citizens who faithfully pay their taxes," emphasized Ahn Deok-soo, Assistant Commissioner for Investigation at the NTS. "Moving forward, we will cooperate closely with relevant domestic and international agencies to continuously monitor and aggressively counter illicit corporate fund outflows and abnormal gift tax evasion."

Nam Seong-hwan

#NTS #Tax evasion #Minimum wage