National Tax Service Launches Tax Probe into 'Corporate Supercars'... Why CEOs Are Truly Worried

National Tax Service Launches Tax Probe into 19 Corporations; Estimated Tax Evasion at 300 Billion Won
Mandatory Driving Log and Light Green License Plate Requirements Fail to Curb Trend
Despite Regulations, Corporate Supercars Rise Again as a “Symbol of Wealth”

As the misconception that the ‘light green license plate’ attached to corporate vehicles worth over 80 million won is a ‘true symbol of wealth’ has spread, and purchases of expensive vehicles by corporations are once again increasing, the National Tax Service has launched a tax investigation in response. The National Tax Service is conducting a rigorous tax probe to eradicate the recurring misuse of high-value corporate vehicles for private purposes. The agency announced that it will focus its investigation not only on the private use of luxury cars owned by corporations, but also on malicious tax evasion by corporations that have avoided legitimate taxes through various expedient methods.

On May 30, an official from the tax industry stated, “The reason corporations that have used so-called ‘corporate supercars’ for personal purposes are so wary of these tax investigations is that the National Tax Service’s inquiry does not stop at simply examining corporate vehicles. In order to scrutinize whether the costs related to corporate vehicles have been properly processed, the accounting of the entire corporation must be reviewed, which means that additional violations may be uncovered in succession.”

Owning a corporate supercar itself is not illegal. However, for corporate vehicles, the acquisition cost, insurance premiums, fuel expenses, automobile tax, and other maintenance costs can be processed as company expenses, thereby reducing profits and lowering the corporate tax base. As a result, corporate supercars are being exploited as a channel for tax evasion.

According to the National Tax Service, companies where private misuse of expensive corporate vehicles was detected often faced larger amounts of additional tax assessments compared to similar corporations. Im Kwanghyun, Commissioner of the National Tax Service, has emphasized, “Abnormal behaviors by major shareholders and their families, such as the private use of corporate vehicles, are not simply a deviation but a significant indicator of the overall tax evasion risks faced by the company. The practice of major shareholders and their families using high-priced vehicles purchased with corporate funds for personal purposes must be eradicated—not only to realize tax justice but also to normalize what is abnormal.”

Such behaviors were also confirmed in the National Tax Service’s 2020 investigation. At that time, the agency conducted tax audits on 24 individuals who purchased ultra-high-priced supercars under company names and used them for personal purposes to evade taxes. During this process, authorities uncovered cases of slush fund creation through shell affiliates, embezzlement of company funds through unreported sales, and irregular gifting using paper companies, all of which are considered expedient methods of tax evasion that allowed major shareholders and their families to siphon off corporate profits and accumulate personal wealth.

Anduksoo Ahn, Director of the National Tax Service Investigation Bureau, is giving a briefing on the corporate supercar tax investigation at the Government Complex Sejong on the 28th. National Tax Service

As a result, the National Tax Service conducted a detailed analysis of the private use of corporate vehicles and selected 19 corporations as targets for investigation. The 19 corporations under investigation collectively own 90 high-priced vehicles valued at approximately 30 billion won. The total suspected amount of tax evasion reaches about 300 billion won.

Andeoksoo, Director of the National Tax Service Investigation Bureau, stated, “We will thoroughly verify not only the expedient and illegal acts of corporations, but also the wealth accumulation process of major shareholders and any related companies suspected of tax evasion. If intentional tax evasion is discovered during the investigation—such as using borrowed-name accounts or manipulating documents to underreport sales or siphon off corporate funds—we will respond strictly, including filing charges under the Punishment of Tax Offenses Act.”

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