Suspected Tax Omission on Apartment Deals, Tax Probe for 1,478 Individuals

The National Tax Service (NTS) began its intensive tax investigation against 1,478 individuals, who declared reduced amounts of tax while reselling apartment ownership titles in Seoul and the Metropolitan area, or reselling after owning apartments for less than a year.

The NTS announced on the 6th that it analyzed 4,451 cases of false tax declaration, including apartment ownership titles of Seoul and the Metropolitan area dealt between January, 2000 and December, 2001, and confirmed that 1,478 individuals will be investigated.

If the speculators are categorized, 1,411 of them are ownership resellers in Seoul’s Kangnam, Kangdong, Kwanak, Kwangjin, Dobong, Mapo, Seocho, Sungdong, Songpa, Yeongdungpo, Yongsan districts and Kyunggi’s Sanbon, Bundang, Pyeongchon, Suji areas, and 67 of them are short-term transferors of 30 apartment complexes in Seoul’s Kangnam, Seocho, Kangdong, Yongsan districts and Kyunggi’s Kwacheon area.

The NTS investigation director Lee Joo-Suk said, "Most of the excluded 2,973 individuals are also suspected of tax omission, even though in small amounts. They will be either encouraged to declare properly, or investigated following separate schedules."

Lee, however, added that "Although selected to be investigated, once capital gains tax is reported properly, the individual will be excluded from the investigation."

The NTS plans to start an additional tax probe, as soon as it receives estimated capital gains tax declaration for deals that took place between November, last year, and January, this year.

Apart from capital gains tax investigation, NTS is to pursue actual income earners, who resold ownership titles without transfer declaration, and expose professional speculators, who illegally bought and sold subscription accounts.

Also, it is to investigate against real estate dealers who collected large amount of commission while mediating apartment ownership deals.

Director Lee emphasized, "Serious measures will be taken against individuals who do not cooperate in the investigation, or hide actual prices by prearrangement."

Kwang-Am Cheon iam@donga.com