The National Tax Service (NTS) has launched investigations into individuals suspected of tax evasion by using corporate funds for personal luxury, including the private use of supercars registered under corporate names. Following the introduction of green license plates, there has been a resurgence in the purchase of high-value corporate vehicles, prompting the NTS to target these irregular tax practices involving 'corporate supercars.'
On May 28, the NTS announced that it has selected 19 corporations suspected of supporting lavish lifestyles for their owners or engaging in improper gifting and fund misappropriation. The targeted companies collectively own 90 high-value vehicles, valued at approximately 30 billion won. The total amount of suspected tax evasion is estimated at around 300 billion won.
The NTS plans to focus on several key areas during the investigation, including the use of corporate funds to support extravagant lifestyles, irregular accounting practices, and improper gifting to the owners' children.
Despite the introduction of the green license plate system aimed at curbing the private use of high-value corporate vehicles, registrations have continued to rise. In fact, the number of new registrations for corporate vehicles valued over 100 million won increased from 48,894 in 2022 to 51,542 in 2023. Although the number dropped to 33,960 in 2024 due to the impact of the new license plate system, it has risen again to 39,429 this year.
The NTS has also uncovered evidence that some owners have manipulated driving logs while using corporate supercars for personal visits to golf courses, entertainment venues, and luxury hotels.
In one case, a corporation purchased six supercars worth 3.6 billion won using corporate funds for personal use by the owner’s family. Another company was found to have improperly classified approximately 1.5 billion won in entertainment expenses at a room salon as corporate costs over several years.
Instances of overseas asset concealment and improper gifting have also been detected. One owner failed to report 17 billion won earned from overseas stock investments, hiding the funds in foreign accounts, while another individual is suspected of improperly gifting funds for the purchase of buildings worth several billion won to their underage children.
The NTS noted an increase in irregular succession methods, such as transferring high-value vehicles to family companies at undervalued prices or providing large loans without interest. They plan to conduct thorough examinations of the overall flow of funds.
Additionally, the NTS intends to verify fund flows through digital forensics, tracking financial accounts, and conducting on-site inspections. If intentional tax evasion is confirmed, they will pursue legal action under the Tax Offenses Punishment Act.
An NTS official stated, "Using corporate vehicles and funds for personal purposes undermines tax fairness and creates a sense of relative deprivation. We will pursue luxury tax evasion relentlessly."
* This article has been translated by AI.
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