Company CEO Referred for Changing Property Title to Cut Tax from 10 Million Won to 100,000 Won

Entered into an agreement with an acquaintance and transferred the trustor status as well
Police: “Strict enforcement against illegal real estate activities, including tax evasion”

A corporate CEO in her 40s who changed the registered ownership of real estate to reduce her comprehensive real estate holding tax burden and transferred the related trustor status to an acquaintance with fewer assets and a lower tax burden has been referred to the Public Prosecution Office.

Seoul's Dongdaemun Police Station said on October 23 that it had referred a woman in her 40s, identified as A, and B Co., Ltd., which she heads, to prosecutors without detention on suspicion of violating the Act on the Registration of Real Estate under Actual Titleholder's Name.

According to police, in 2022 A searched online for ways to evade taxes because she feared that the comprehensive real estate holding tax burden on B, a real estate rental company she heads, would increase. She entered into a trust agreement with the company, naming herself as the trustee. Police concluded that the agreement did not involve the actual entrustment of the real estate and instead constituted a title trust, in which only the registered ownership was transferred.

A is also suspected of transferring the trustor status to an acquaintance, identified as C, who had a lower tax burden, taking advantage of the fact that the comprehensive real estate holding tax is levied based on the trustor. As a result, B paid nearly 10 million won in comprehensive real estate holding tax each year through 2022, but its payments reportedly fell to less than 100,000 won a year starting the year after the trustor status was transferred.

The case began in late July, when Changwon Seobu Police Station in South Gyeongsang Province received a complaint. It was later transferred to Seoul's Dongdaemun Police Station, which has jurisdiction over the suspects' residences. Police examined past tax records and the history of real estate ownership to establish how the alleged offenses were carried out.

Police also referred B, applying the joint penal provisions of the Act on the Registration of Real Estate under Actual Titleholder's Name, on the grounds that the company could also bear legal responsibility. The provisions allow a company to be held separately liable when an individual, such as its representative, violates the law in connection with the company's business.

A police official said, "In accordance with our special crackdown plan on real estate crimes, we will continue to strictly investigate illegal activities related to real estate, including tax evasion using unorthodox methods." The official added, "People should be aware that they may be punished for using improper means to avoid their tax obligations."

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