Samsung Electronics Audited for First Time in 11 Years

The Samsung Electronics Corporation, one of the most representative affiliates of the Samsung Group, is receiving a tax audit. Samsung Electro-Mechanics also received a tax audit recently.

The National Tax Service (NTS) started to inspect the corporate income tax of the headquarters of Samsung Electronics early this month, and it is now analyzing materials on operating income and finance.

The “S” accounting firm which provides advice to Samsung Electronics has dispatched a task force team to Samsung Electronics to help the company deal with the inspection.

An executive of Samsung Group said that this inspection is just a periodic audit, not a special case, and Samsung Electro-Mechanics also received a periodic tax audit recently.

This inspection is on the company’s financial status and operating income of the last five years. The statutory time limitation on tax imposition is five years, and in this period taxes cannot be imposed without accusations of tax evasion. Under this regulation, materials of 2001 will be excluded in this inspection.

Samsung Electronics has not received a tax audit since 1996. Most companies receive periodic tax audits every four to five years, but Samsung Electronics received the Gold Tower Order of Industrial Service Merit in 2002 and 2004, so tax audits were suspended.

However, the company failed to receive any award which suspends tax audits last year, so many people expected that the company would receive a tax audit.

The NTS said that it cannot tell whether to inspect a specific company, but it did not deny that it has inspected Samsung Electro-Mechanics and Samsung Electronics.

Some people cautiously say that this inspection is a periodic audit, but there may be other reasons for it.

However, a high-ranking official at the NTS made it clear that this inspection is just a periodic one.