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505.6 Billion Won Retroactive Tax on 23 Media Companies

Posted June. 20, 2001 19:28,   


The National Tax Service (NTS) completed the tax investigation on 23 major media companies which began from last February, and decided to levy taxes of 505,6 billion won on the companies and the controlling shareholders. And it is reviewing whether to charge 6, 7 media companies on suspicions of intentional tax evasion with violating the tax law.

Sohn Young-Lae, head of the Seoul Regional Tax Office, announced in the press conference yesterday that `` the NTS virtually completed on 19th `the 1995-1999 regular tax investigations` on the broadcasting companies, the newspaper companies, and the media companies which had been launched from February 8. Now the NTS is considering to charge 6, 7 media companies on suspicions of illegal tax evasion to the prosecutors office``.

An official of the NTS told that the NTS already started to notify the tax amount to individual companies from 19th , and it will complete the notification for all companies until 23rd, and will decide whether to accuse to the prosecutors office or not until the end of this month.

Sohn explained that ``since the NTS did not finish the probe on the contents of financial transaction related to the stock change investigation and the foreign transaction section, it will delay its decision whether to lay formal charges``.

And Sohn told that ``the NTS decided to levy 322.9 billion won on 23 media companies and their subsidiaries, and 182,7 billion won on the controlling shareholders. No company was free from paying penalty taxes``.

The tax evasion of the media companies and their subsidiaries can be broken down as follows; excessive free copies (68.8 billion won), income missing (29.6 billion won), false cost sum-up and non-operating cost (50.3 billion won), illegal transactions between affiliates (27.5 billion won), and false adjustment of tax (146.7 billion won). The tax evasion of the controlling shareholders follows; roundabout succession of stocks and trust using other`s name (68.1 billion won), illegal activity (25.1 billion won), donation of cash and financial asset (46.0 billion won), and evasion of a capital gains tax (43.5 billion won).

The media companies who were notified the charge of penalty tax can file a formal objection or claim a judgment to the NTS or the National Tax Judgment Office (NTJO). If the claims are filed, the tax offices or Seoul Regional Tax Office should decide the legality of tax charge within 30 days, and the NTS and the NTJO should decide respectively within 60days and within 90 days.

For an appeal of dissatisfaction against the decision of the NTS or the NTJO, an administrative litigation should be filed to the court within 90 days.

Most media companies who were under this tax probe are likely to take this procedure.

Lee Byong-Ki eye@donga.com