After Cracking Down on New Town Real Estate Tax Evasion Suspicions, 94 Cases Followed... 53.4 Billion Won Recovered

Announcement of Interim Results from the National Tax Service's Special Investigation Team on Real Estate Tax Evasion in Development Areas

[Sejong=Asia Economy Reporter Kim Hyunjung] Developer A, engaged in real estate development projects in newly developed housing sites, paid excessive sales agency fees to client B. It was later discovered that B had received services from C, a company wholly owned by A's minor child, and falsely paid tens of billions of won in sales agency fees, thereby embezzling corporate funds. Companies including A are expected to be charged tens of billions of won in corporate taxes.

D, a person in their 30s with minimal reported income, acquired multiple real estate properties including land in planned development areas. However, due to insufficient source of funds, the National Tax Service conducted an additional investigation and confirmed that D had received several hundred million won in cash gifts from family members. His father served as a corporate representative receiving a high salary, and his mother operated a housing construction and sales business. The National Tax Service plans to collect several hundred million won in gift taxes.

The National Tax Service announced on the 2nd that it had identified a total of 94 cases of suspected real estate tax evasion in development areas over the past two months and plans to collect 53.4 billion won. This information was disclosed during the interim results announcement of the government's real estate speculation investigation and prosecution.

The National Tax Service Special Investigation Team established the 'Special Investigation Team for Real Estate Tax Evasion in Development Areas' on March 30, led by the Deputy Commissioner of the National Tax Service, consisting of 175 local tax office staff and 25 tax office personnel. They analyzed land transaction details exceeding a certain amount in 44 large-scale development areas nationwide to verify tax evasion suspicions.

On April 1, as a result of analysis of six areas including Namyangju Wangsuk, Hanam Gyosan, Incheon Gyeyang, Goyang Changneung, Bucheon Daejang, and Gwangmyeong Siheung?planned sites for the 3rd New Town?tax investigations were initiated for 165 individuals suspected of lacking funds for land acquisition due to tax evasion.

On the 13th of last month, the scope of analysis was expanded to 44 large-scale housing and industrial complex development areas nationwide, and a second tax investigation was launched for 289 individuals, including family members of business owners who acquired land through improper corporate fund outflows and agricultural corporations that omitted income from subdivided farmland sales.

Currently, the National Tax Service plans to collect approximately 53.4 billion won in gift and corporate taxes for a total of 94 cases, and investigations are ongoing for the remaining 360 cases. During the investigation, two cases of tax evasion through fraudulent documentation were detected and will be reported under the 'Tax Crime Punishment Act.' Additionally, four cases of violations of the Real Name Real Estate Act, such as registering land in development-restricted zones under others' names, were identified and are pending notification to relevant agencies.

The National Tax Service plans to conduct detailed verification of whether the acquisition funds in the 360 ongoing cases involve disguised gifts and whether the income and corporate tax filings of businesses are appropriate. They will also analyze tax evasion suspicion data notified by the police and individuals frequently acquiring land to select additional tax investigation targets, thereby strengthening verification against tax evasion through real estate transactions.