Personal Use of Corporate Credit Cards Under Investigation

The National Tax Service (NTS) has begun inspections into the personal use of corporate credit cards by employees or employers.

According to the NTS and the economic world, the NTS has called for enterprises to analyze detailed statements of corporate credit card use in 2002 and submit data explaining uses unrelated to business.

This followed the theory that corporate credit cards are often used at places unrelated to business such as golf practice ranges, health clubs, beauty shops, dog grooming centers and plastic surgery centers.

Previously, NTS had picked out 44,646 enterprises which were suspected of abusing corporate credit cards on the basis of corporation tax reports in March 2003, and requested them to make correct reports in advance.

The NTS, in addition, has called for enterprises to make amended reports on corporation taxes to a tax office in cases where they had mistaken personal uses of employers for corporate expenses.

The NTS will subject the enterprises that submit no data for explanation or that offer insufficient explanations to tax investigations and keep them under its supervision.

Businesspeople reacted to this, saying that they would be more prudent in using corporate credit cards from now on.

“It is practically impossible to make personal use of corporate credit cards in large enterprises due to self-checking inspections,” said Yoo, a general manager of a large enterprise, adding that “it may be small and medium-sized enterprises that the NTS is putting into question.”

A source from another small enterprise said that “there is nothing to be shocked at because we have been using a corporate credit card rightfully, but the NTS’ decision to make close inspections makes me think that we should use corporate credit cards more carefully.”

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