NTS Exposed 60 Persons Having Evaded Tax on Internet Business

A special tax investigation on 60 businessmen on suspicion of tax evasion such as so called ‘Cyber Card Discount Lender’, Internet businessmen will be performed.

At 19th, National Tax Service (NTS) announced that it decided to investigate 30 businessmen on suspicion of tax evasion such as persons operating merrymaking restaurants, discounting cards in Internet shopping malls and 30 person operating Payment Gateway.

NTS has investigated Internet commercial businessmen individually, but it is the first time to perform target investigation collectively.

▽ The subject person to investigation= NTS will investigate ▽ the persons reported income too lower than the Internet auction materials or transaction materials ▽ the person omitted income after transaction in other` name and deposited in many banks ▽ the persons notified as 5he suspicion of card discount from Financial Supervisory Service. The investigation also includes the persons Internet card discount by disguising with sale of gift coupon and person clearing the card sales of merrymaking business illegally.

The subject person a Mr. Seo (52) to this investigation, open Internet shopping mall selling gift coupons ‘○○ Ticket Shop’ and loaned after deducting 15% interest rate in advance to borrowers under the connection with card discount organizations. During the procedure, he disguised selling gift coupons to the borrowers and the payments were performed via Payment Gateway. He closed the business after 3 months of lending illegal card loan of 20 billion won. As he closed in short-term, NTS supposed that he had evaded tax on interest rate income.

▽ How the investigation will be performed?= As they transacted in other`s name to conceal their identification, NTS will extend the investigation to the counterpart of the transaction including investigation on financial transaction.

NTS restrains the investigation on the transactions after 2000 when the transaction began to activate. However, if it judges the scale of evasion of tax is too large, it will extend the investigation to the previous transaction. If the method of evasion of tax is malicious, NTS will prosecute them according to Tax Punishment Regulation and Regulation of Finance Institute for Loan to Public Prosecutors’ Office.

Kang Hyung-il, Senior Officer for Computer Investigation of NTS spoke “The persons, subject to this investigation, evaded tax by closing business after making 4 billion to a several hundred turnover for a month.” And added “If supplementary investigation is required, NTS will extend its investigation.”

Jin-Hup Song jinhup@donga.com