Gwangmyeong City Collects 226 Million Won in Delinquent Payments from Businesses Failing Special Withholding Obligations

Criminal Complaints Filed Against Intentional and Habitual Tax Delinquents

Gwangmyeong City in Gyeonggi Province announced on January 7 that it had collected 226 million won in delinquent payments through measures such as filing criminal complaints against businesses that failed to fulfill their special local income tax withholding obligations.

Special withholding refers to a system in which corporations or businesses, when paying wages to employees, withhold local income tax at the rate prescribed by law and then report and pay it to the local government. Failure to carry out this obligation constitutes a clear tax crime.

To strengthen the collection of delinquent local taxes, the city conducted a comprehensive investigation of 143 businesses with more than 500,000 won in overdue special local income tax withholding, and implemented a phased approach that included advance notice of criminal complaints and payment demands.

Following the advance notice of criminal complaints, voluntary payments were made, allowing the city to collect a total of 601 cases of delinquent local taxes, including special local income tax withholding, amounting to 226 million won.

In particular, the city filed criminal complaints with the local police against two businesses that, despite the advance notice, failed to pay without a valid reason or explanation and were found to be intentional and habitual tax delinquents. These businesses had defaulted on 11 cases of special local income tax withholding, totaling 13 million won.

According to the Local Tax Basic Act, a person obligated to special withholding who fails to pay the withheld tax without a valid reason may be subject to imprisonment for up to two years or a fine of up to 20 million won. In the case of a corporation, the representative may also be punished.

Kim Sunmi, head of the Taxation Division of Gwangmyeong City, stated, "Failure to fulfill special withholding obligations is not simply a matter of delinquency, but a serious violation involving the misappropriation of employees’ taxes. We will establish a culture of faithful tax payment through strong measures such as criminal complaints."