Today ENM's 29.6 Billion Won Tax Assessment Canceled After Reinvestigation

KOSDAQ-listed company Oneul E&M is raising expectations for management normalization after receiving a full cancellation decision regarding the first tax assessment among approximately 110.4 billion won in tax risks.

Oneul E&M announced that, in accordance with the retrial decision by the Tax Tribunal, the Seoul Regional Tax Office has notified the company of a cancellation of the original 29.6 billion won first value-added tax assessment for the 2019–2023 fiscal years, following a reinvestigation.

Previously, the tax authorities determined that sales and purchase transactions related to Oneul E&M's travel business from 2018 to 2023 were fabricated, and imposed a total of approximately 110.4 billion won in value-added tax, surtaxes, and related penalties over three separate assessments.

The amount canceled in this first assessment is about 29.6 billion won. Last year, Oneul E&M reflected approximately 54.1 billion won in tax-related provisions in its semiannual report, as the possibility of large-scale additional tax payments had been a long-term burden on the company's valuation.

This cancellation is the result of a retrial decision by the Tax Tribunal. Since June 8 of this year, Oneul E&M has been undergoing a reinvestigation of the first and third assessments in accordance with the Tax Tribunal's decision. As a result, the Seoul Regional Tax Office's first assessment has now been canceled.

The remaining tax risk stands at approximately 80.8 billion won, consisting of the second assessment by the Namdaemun Tax Office (about 30.1 billion won) and the third assessment by the Yeongdeungpo Tax Office (about 50.7 billion won).

The company expects that the cancellation of the first assessment will have a positive impact on resolving the remaining tax issues as well.

In particular, the company explained that a lawsuit to nullify the second assessment is currently underway, and that the same tax period and transaction structure as the first assessment are under dispute. Because of this, the key grounds on which the first assessment was canceled are expected to serve as an important reference in the legal proceedings for the second assessment as well.

The company is also awaiting the outcome of the reinvestigation into the third assessment. The approximately 50.7 billion won levied by the Yeongdeungpo Tax Office is also included in the scope of the Tax Tribunal's retrial decision.

The company believes that, should additional cancellations occur, the tax risk that has burdened its financial statements and valuation will be significantly alleviated. In particular, this could trigger an improvement in its financial structure, as there is a possibility that both the accounting treatment of provisions already recognized and the actual tax payment obligation will change.

Oneul E&M's management stated, "The cancellation of the first assessment through this retrial is the crucial first step in relieving the company of the tax risks that have been weighing it down. Building on this momentum, we will proceed to quickly resolve the remaining second and third tax issues and aim to secure a definitive reevaluation of the company's value in the market."

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