Korea National Oil Corporation: "Actgeo's Overdue Taxes of 2 Million Won... Never Paid on Their Behalf"

Act-Geo, a US deep-sea technology evaluation specialist company that explored and analyzed the East Sea deep-sea gas field, was found to have had a corporate franchise tax arrearage of about $1,650 at the time of signing a contract with Korea National Oil Corporation (KNOC) in February last year.

On the 9th, KNOC stated in an explanatory document, "The amount of Act-Geo's tax arrears was a small amount of around 2 million KRW and was confirmed to be due to an oversight."

On the 5th, Dr. Vitor Abreu of Act-Geo from the United States, who arrived through Incheon International Airport, is answering reporters' questions. He is expected to explain his analysis of the possibility of oil deposits during his visit to Korea. Photo by Yongjun Cho jun21@

It added, "Act-Geo fully paid the outstanding tax amount of $1,650 in March last year and retroactively restored its legal capacity, including the previously restricted right to sue."

It had previously been revealed that Act-Geo had been delinquent in corporate franchise tax for four years from January 2019 to March last year. This led to criticism that KNOC did not properly verify the party entrusted with analyzing a major national project. Some opposition parties raised suspicions that Act-Geo only resolved the tax arrears issue in March last year after receiving the service contract payment from KNOC.

In response, KNOC denied, stating, "We have never paid Act-Geo's delinquent taxes on their behalf."

KNOC explained that it signed the contract with Act-Geo in February last year and began paying the service fees from May of the same year, while Act-Geo settled the tax arrears in March last year.

According to the Ministry of Trade, Industry and Energy, Act-Geo was required to pay $50 annually to the Texas state government in the US.

Under Texas state law, companies with sales exceeding $2.47 million must pay a franchise tax of 0.375% of margin for retail companies or 0.75% for non-retail companies, but Act-Geo did not meet the sales threshold and only had to pay $50 annually for corporate registration service fees.

Summarizing the Ministry's explanation, Act-Geo handled this tax issue online for two years from its founding in 2017 until 2019.

As the business grew, it hired an external accountant, and due to an oversight, it failed to pay $50 each in 2019, 2021, and 2022, totaling $150, according to the Ministry.

The Ministry added that Act-Geo paid the total $1,650, including penalty fees, in a lump sum in March 2023.

However, when Act-Geo signed the contract with KNOC in February last year, despite the franchise tax arrears, it maintained its corporate status and was able to freely enter into contracts.

According to the Ministry, Act-Geo issued corporate-related reports (public information reports) annually during the delinquency period and signed numerous overseas service contracts, including with KNOC.