Seoul City 38 Tax Collection Division Tracks Malicious Delinquent 'Closed Corporations' to Collect 20-Year-Old Taxes

Seoul City 38th Tax Collection Division Collects 715 Million KRW in Delinquent Taxes from Closed Corporations After Over Two Years of Pursuit

[Asia Economy Reporter Lim Cheol-young] The 38th Tax Collection Division of Seoul City announced on the 28th that it has collected taxes that a corporation, which maliciously evaded acquisition tax amounting to billions of won and closed down in 2006, had been delinquent on for 20 years after persistent tracking.

The 38th Tax Collection Division tracked and investigated the mortgage holders of commercial real estate owned by the delinquent closed corporation for over two years. After canceling the mortgage, which was the biggest obstacle to tax collection, they completed the public auction of the property and collected about 500 million won.

During the public auction process, the 38th Tax Collection Division also uncovered that the mortgage holder (tenant) of the property abused the corporation’s closure by posing as the building owner and illegally subleased the commercial space to a large supermarket, embezzling rent for 20 years. The city, with the court’s judgment, also recovered 200 million won, part of the tenant’s rental deposit, and collected it as delinquent tax.

A Seoul city official explained, "Despite many restrictions on tax collection activities due to COVID-19, the investigators of the 38th Tax Collection Division meticulously examined the creditor-debtor relationships through related documents and achieved the collection of 715 million won in delinquent taxes after over two years of professional tracking."

Seoul City plans to continue strengthening professional tax collection activities through thorough investigations of creditor-debtor relationships, such as false mortgage registrations on delinquent owners’ properties. For livelihood-type delinquent taxpayers who have the willingness to pay and can recover, the city intends to support normal economic activities by lifting bad credit registrations and postponing tax collection measures.

Lee Byung-han, Director of Seoul City’s Finance Bureau, said, “This case is an example where investigators persistently and professionally tracked a false mortgage holder who cunningly exploited a maliciously tax-evading closed corporation to collect delinquent taxes. Seoul City will never neglect even long-standing delinquencies and will pursue collection to the end to realize tax justice.”