Establishment of Corporate Investigation Team Shows Results in Three Months
33 Cases of Tax Evasion Schemes to Avoid Heavy Taxation Detected
Gangnam-gu, Seoul (District Mayor Jo Seong-myeong) announced on the 22nd that through the newly established Corporate Investigation Team in July, it conducted field-centered planned investigations on over 2,400 cases, uncovering 33 cases of tax evasion including acquisition tax within three months and discovering 11.5 billion KRW in tax revenue.
To proactively respond to increasingly sophisticated corporate tax avoidance, the district established a dedicated team and selected four key focus areas where post-management of heavy taxation was insufficient: acquisition of real estate after taking over dormant corporations, corporations outside major cities acquiring real estate in Gangnam-gu and establishing headquarters or branches, disguised acquisition of luxury housing, and establishment/increase of capital in corporations avoiding registration and license tax surcharges.
The total amount of taxes discovered from January to October was 14.9 billion KRW, approximately 2.8 times higher than the 5.2 billion KRW discovered during the same period in 2023. In particular, after the Corporate Investigation Team was established, 11.5 billion KRW was uncovered from investigations conducted between July and October, maximizing results in a short period.
The investigation identified 20 cases where dormant corporations that were not actually operating acquired real estate in Gangnam-gu. These entities attempted to evade taxes amounting to 6.8 billion KRW by using the names of dormant corporations. Additionally, four cases were confirmed where corporations established outside the overconcentration control zones such as Yongin, Yangpyeong, and Paju acquired real estate in Gangnam-gu and operated as headquarters or branches, resulting in the collection of 1.8 billion KRW in taxes.
In a case where a residential-commercial complex including a swimming pool was newly constructed but was effectively used entirely as luxury housing, 900 million KRW of tax evasion was detected. Furthermore, seven cases were uncovered where corporations belonging to industries subject to heavy taxation in the past five years avoided registration and license tax by establishing or increasing capital as corporations excluded from heavy taxation and reported and paid taxes at general rates, resulting in 600 million KRW being discovered.
Moreover, during this investigation, two tax audits were conducted in collaboration with the Seoul City Tax Investigation Team, uncovering 1.4 billion KRW in omitted tax revenue. This cooperation served as an opportunity to discover new types of tax evasion, share tax audit techniques, and enhance the investigative capabilities of staff. The district plans to continue joint investigations with Seoul City in the future.
District Mayor Jo Seong-myeong stated, “Gangnam-gu has the highest number of corporations among Seoul’s autonomous districts, and we will firmly respond to the sophisticated tax avoidance activities of some corporations.” He added, “We will continue to strengthen tax audit capabilities to create a culture where sincere taxpayers are respected and contribute to stabilizing the district’s finances, which are struggling due to decreased revenue.”
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