NTS Launches Crackdown on "Corporate Supercar" Tax Evasion... 19 Corporations Under Intensive Audit

90 High-End Vehicles Owned by 19 Corporations... Valued at Around 30 Billion Won
Suspected Tax Evasion Amounts to 300 Billion Won

The National Tax Service (NTS) has launched a crackdown on so-called “corporate supercar” tax evasion, where luxury cars are purchased under corporate names but used for private purposes. Despite requirements for maintaining driving logs and attaching green license plates, the number of corporate supercars has been on the rise again, prompting the NTS to initiate more rigorous tax investigations in an effort to eradicate such practices.

On May 28, the NTS announced that it had conducted an in-depth analysis of the private use of corporate vehicles and selected 19 corporations for tax audits. According to the NTS, the 19 companies under investigation collectively own 90 high-end vehicles, valued at approximately 30 billion won. The total amount suspected of tax evasion is estimated to reach about 300 billion won.

Ahn Deoksoo, Director of the Investigation Bureau at the NTS, stated, “Corporations have evolved their methods of tax evasion. To avoid the initial ‘stigma effect’ of green license plates, they acquired vehicles worth more than 80 million won while underreporting the purchase price by drawing up false contracts and filing reduced acquisition values. In addition, some reported ultra-luxury supercars as business vehicles but allowed the owner’s children to use them for personal purposes, such as visiting nightclubs, clubs, and golf courses, while falsifying driving logs. There were also cases where vehicles were transferred to the owner without compensation yet still falsely listed as corporate assets.”

The NTS has further identified additional types of corporate tax evasion, including: the use of corporate funds for the lavish and extravagant lifestyles of company owners and their families; the outflow of corporate funds through irregular accounting practices or transactions; and indications of illicit gifting of corporate assets to the owner’s children.

According to the NTS, the owner of one company selected for investigation misappropriated corporate funds to purchase supercars worth several billion won. Another subject purchased three luxury supercars in the company’s name, worth a total of around 800 million won, which the owner’s family used privately for activities such as visiting golf courses, luxury hotels, department stores, and high-end spas, thereby indulging in an extravagant lifestyle.

Also under investigation are corporations that improperly diverted company funds by selling corporate supercars to the owner at below-market prices, inserting the owner’s children’s companies into transactions to provide windfall profits, or covering personnel expenses for the owner’s children’s companies. In one case, an owner purchased about 40 high-end imported cars under the company’s name and provided them for private use to both family and executives. The same owner also lent approximately 20 billion won interest-free to a company controlled by their spouse for the purchase of virtual asset mining equipment, sharing the resulting profits. Furthermore, while accumulating wealth from mining virtual assets, this owner failed to report approximately 17 billion won held in overseas financial accounts under the family’s name.

Through these tax audits, the NTS plans to thoroughly verify not only corporate irregularities and illegal activities but also the process by which the owner’s family accumulated wealth, as well as any related companies suspected of tax evasion.

Director Ahn emphasized, “If we discover during the investigation that someone has intentionally evaded taxes by using borrowed-name accounts or falsifying documentation to underreport sales or divert corporate funds, we will strictly respond by filing charges under the Punishment of Tax Offenses Act. Going forward, the NTS will strengthen its own information gathering on unfair tax evasion and, in close cooperation with domestic agencies, will continue to actively respond to corporations’ unjust outflow of funds and illicit gifting activities.”

This content was produced with the assistance of AI translation services.