Tax Audit Targets Speculation Suspects in Yeongi-Gongju-Pyeongtaek

A tax audit will be carried out on some 130 people suspected of real estate speculation in the three areas: Yeongi-gun and Gongju City in Chungnam Province, and Pyeongtaek City in Gyeonggi Province.

The National Tax Service (NTS) announced that advanced notification will be sent to the 130 suspected of speculation, who all made real estate transactions after 2003, on May 10. The tax audit will be carried out for 20 days from May 17.

Yeongi and Gongju are the locations for the new administrative city, and with the U.S. military base transfer, land prices in Pyeongtaek are jumping with the upcoming land compensation.

Audit Centered on National Project Areas-

The NTS has indicated a total of 14 areas, Paju and Hwaseong cities in Gyeonggi Province, Gyeryong, Cheonan and Asan cities in Chungnam Province, and Haenam and Yeongam-gun in Jeonnam Province, along with the above three areas subjected to a tax audit, as land speculation arising areas.

These areas are where large-scale national projects, such as constructing a leisure town, are being planned, in addition to the establishment of the administrative city.

The NTS said, “If even the smallest possibility of speculation shows up in the areas that have national projects scheduled in them, those people will be subjected to a strong tax audit, just as with land speculation arising areas.”

Regional tax offices will carry out tax audits in land speculation arising areas other than Yeongi, Gongju and Pyeongtaek.

The NTS has also pointed out 180 apartment complexes as housing speculation arising areas. Most of the complexes are in the Gangnam area in Seoul, Bundang-gu in Seongnam City and Gwacheon City in Gyeonggi Province. An investigation into the actual targets of possible state and partial tax audits started at the end of April.

Tracking Financial Transactions and Investigating Usage of Transfer Payments-

Concerning the course of further tax audits, Han Sang-ryul, the head of the Investigation Bureau at NTS, said, “A track-down of financial transactions, along with an investigation into the whereabouts of transfer payments (speculation income) will be carried out together, and a report center for real estate speculation will be established.” The targets of this tax audit are 59 people who reported a lower capital gain after selling land in Pyeongtaek, 20 who acquired land in Pyeongtaek with uncertain fund sources, 26 who deducted their capital gains tax in Yeongi and Gongju by illegal transactions, and 25 who are out-of-towners or under-aged and frequently transact land in Yeonggi and Gongju. This comes to a total of about 130 people.

A real estate speculation report center will be established at each tax office and the NTS internet homepage (www.nts.go.kr), and up to 100 million won will be rewarded to each tax evasion informer.

Eun-Woo Lee libra@donga.com