S. Korea’s tax agency launches probe into UBS for tax evasion: source
South Korea’s tax agency has launched an investigation into the Seoul branch of UBS on suspicion of tax evasion, industry sources said Wednesday.
According to the sources, the National Tax Service (NTS) began the probe late last year on suspicions that the Swiss bank did not report 51 billion won (US$47.3 million) worth of profit it allegedly reaped from illegal derivative transactions.
“We have learned that the Seoul branch of UBS has been under investigation (by the NTS) on tax evasion charges,” a high-ranking industry official said on condition of anonymity.
The NTS could not be reached for confirmation or response.
The branch reportedly evaded taxes by artificially creating a deficit through earlier settlements on derivatives with offshore companies. It is also accused of avoiding taxes via transfer deals on state bonds by taking advantage of the tax exemptions granted to such bonds held by nonresidents here.
“It is just a regular tax probe made every five years,” said an official at the Seoul branch of UBS. “The rumor that we were involved in manipulating derivatives trading or doing fake state bond trading is groundless.”
The financial watchdog said it will investigate the branch to determine whether it violated financial regulations after reviewing the tax agency’s probe results.
The Seoul branch, which opened in 1998, has sold won-denominated bonds and financial instruments to companies and institutional investors.
As of end-September, its capital stood at 159.4 billion won and the total assets stood at around 4.3 trillion won.
Copyright Yonhap News Agency, 2014. All rights reserved.
Credit: Global Post