A fleet of supercars is parked inside a garage in this undated photo. Yonhap
Korea’s tax authorities announced a sweeping investigation Thursday into what they described as an expanding culture of tax evasion among wealthy business owners using corporate money to finance lavish personal lifestyles — from fleets of Ferraris and Lamborghinis to luxury hotels, designer shopping and overseas asset concealment.
The National Tax Service said it had launched audits into 19 corporations suspected of abusing company-owned supercars and siphoning off corporate funds through questionable accounting practices, shell companies and irregular family transactions. Together, the firms owned about 90 high-end vehicles worth roughly 30 billion won ($22 million), while the total amount of suspected tax evasion reached nearly 300 billion won.
The investigation reflects growing public frustration in Korea over widening inequality and the conspicuous displays of wealth by corporate executives, particularly on social media platforms where luxury lifestyles are often flaunted before millions of followers.
In one example cited by the tax agency, the owner of a manufacturing company allegedly purchased six supercars worth more than 3.6 billion won under the company’s name while freezing employee wages for years. The executive was also accused of charging roughly 15 billion won in entertainment expenses at luxury hostess bars to the company and receiving excessively high salaries without clear justification.
Another company executive allegedly bought three supercars through a corporation before transferring them at discounted prices to a child’s privately controlled firm, allowing family members to use the vehicles personally while avoiding gift taxes. Authorities also said the family redirected business contracts through the child’s company to generate illicit profits.
The tax service said some owners went even further, using company funds to renovate private homes with imported furniture and luxury interiors, while others allegedly moved money overseas through fake advertising contracts with paper companies in tax havens.
One investigation involves a corporate owner accused of lending about 20 billion won interest-free to a company controlled by a family member that purchased cryptocurrency mining equipment. Tax officials said the family then failed to report approximately 17 billion won held in overseas financial accounts.
The crackdown comes despite a series of regulatory measures introduced over the past decade to curb the abuse of company vehicles. Korea mandated driving logs and dedicated insurance policies for corporate cars in 2016, and last year introduced distinctive lime-green license plates for company vehicles worth more than 80 million won.
But the policy appears to have had unintended consequences.
Source: Korea Times News
