S. Korea Probing Toyota Korea over Suspected Tax Evasion
South Korea’s tax authorities have been investigating the local importer of Toyota and luxury Lexus vehicles over suspected tax evasions since late 2016, industry sources said Friday.
In November, the Seoul office of the National Tax Service (NTS) launched a tax audit into Toyota Korea over suspicions that it paid less income tax by fabricating transfer prices of goods and services in transactions with its parent and underreporting taxable income, according to the sources.
A Toyota Korea official refused to disclose the details of the tax investigation.
“I understand it is a regular tax audit carried out every five years,” he said. “It is hard to deliberate on the issue since the investigation is ongoing.”
An NTS official refused to confirm the tax probe. “We can’t comment on tax audits into individual companies.”
Established in 2000, Toyota Korea runs 44 showrooms and 37 service centers across South Korea. Its sales hit a record high of 19,859 units last year.
The NTS has been ramping up efforts to root out offshore tax evasion by exchanging information on financial and nonfinancial taxation in offshore centers with tax authorities of major countries.