South Korea's tax agency launches audits into corporate-owned luxury homes

By Kang Yoon-seung

SEOUL, Aug. 25 (Yonhap) -- South Korea's tax agency said Tuesday it has launched tax audits of 50 companies on suspicions their owners and family members used corporate-owned luxury homes for private purposes as part of tax evasion schemes.

The National Tax Service (NTS) said the audits came after an earlier review found that owners and their family members had privately used 1,097, or 42 percent, of the 2,639 corporate-owned homes surveyed.

The review covered homes larger than 85 square meters and with an officially assessed value exceeding 900 million won (US$651,000), making them subject to the comprehensive real estate holding tax.

The NTS said the 50 companies were suspected of tax irregularities involving a combined 1.9 trillion won.

They allegedly provided residences to owners' families, helped them dodge multiple-home ownership and lending regulations or maintained vacation homes for their exclusive use.

According to the NTS, one company purchased a luxury home in central Seoul for more than 20 billion won and spent an additional 10 billion won in corporate funds on expansion and interior work.

Another company purchased a high-end home worth around 4 billion won in a posh district of southern Seoul and allowed its owner to use it as a private house without registering his residency there.

A separate company based in the southeastern port city of Busan bought an apartment worth around 4 billion won in Seoul for its owner's family and provided it rent-free.

The NTS said it plans to expand its investigation to corporate-owned homes abroad that have been provided free of charge to owners' children studying overseas, along with corporate payments for tuition and even living expenses.