The Korea Racing Association and the Korea National Oil Corporation Face Tax Evasion Accusations

Both the Korea National Oil Corporation and the Korea Racing Association may have to pay eight and 10 billion won (or more) in penalties, respectively, for tax evasion charges.

According to the National Tax Service and other related industries on Monday, the Jungbu Regional Tax service found evidence of tax evasion and sent a notification letter of roughly 10 billion won in penalties, as a result of its thorough tax investigation into the Korea Racing Association that occurred last July to September.

The association is reportedly accused of evading taxes by raising the amount of its pari-mutuel ticket sales and expanding entertainment expenses in order to handle the amount as “general expenses.”

In regard to the accusation, rejecting the decision of the National Tax Service, the Racing Association requested for an investigation into the legality of the matter before the taxation.

The Jungbu Regional Tax service also conducted a tax audit on the Korea National Oil Corporation between July and August and imposed 8.5 billion won in penalties of six cases of tax evasion regarding a corporation tax and a value added tax.

The Oil Corporation said, “As a government investment organization, we have diligently obeyed our duty of paying taxes according to regulations and an audit standard, so we cannot follow the order of the National Tax Service.” The corporation added, “We requested an investigation into the legality of the matter before the taxation. If the tax service does not accept our call, we’ll take every necessary step.”

Jae-Seong Hwang jsonhng@donga.com