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Korea Herald
07-08-2025
- Business
- Korea Herald
Foreign buyers flagged in 49 cases of apartment-linked tax evasion
Nearly W8tr in Korean apartments bought by foreign nationals since 2022, with 70% of tax evasion tied to wealthy Gangnam districts South Korea's tax agency has launched a sweeping investigation into foreign ownership of high-end apartments, uncovering 49 cases of tax evasion related to the purchase or ownership of properties. 'We will apply the same level of scrutiny to foreign nationals acquiring apartments in Korea as we do to domestic buyers,' said Min Joo-won, director of investigation at the National Tax Service, during a press briefing held in Sejong on Thursday. 'We are committed to fully tracing the source of funds and imposing proper taxes using all available tools, including financial account tracking and forensic analysis.' The probe comes as the government tightens regulations to curb speculative demand in the capital region. In June, it imposed stricter measures on Korean nationals, including loan caps and mandatory move-in requirements. Foreign nationals, largely outside the scope of these regulations, came under closer scrutiny as the NTS launched a targeted review of high-priced apartment purchases. After analyzing transaction data from 2022 through April this year, the agency uncovered 49 cases of tax evasion. These included 16 involving illicit gift schemes, 20 tied to undeclared income and 13 related to unreported rental income. Tax evasion in Seoul's wealthiest districts The 49 individuals collectively own 230 apartments, with 70 percent concentrated in Seoul's wealthiest districts of Gangnam, Seocho and Songpa. Some properties were valued at over 10 billion won ($7.2 million). The estimated tax losses from these cases range from 200 billion to 300 billion won. The tax evaders came from 12 countries, with about 40 percent identified as ethnic Koreans. Chinese and American nationals accounted for more than two-thirds of the total. The agency said it would prioritize cases involving funds transferred through expedient means, such as gifts routed through untraceable overseas accounts. Many buyers exploited regulatory blind spots by alternating between their foreign resident registration numbers and passport numbers when acquiring property, making it easier to avoid detection. The use of offshore bank accounts further complicated enforcement. Some also disguised the source of funds by submitting false documents, including financing plans or bank balance certificates, to make it appear the funds were legally theirs. The investigation also uncovered signs of criminal conduct, including illegal foreign exchange transactions and the use of cryptocurrency. In one case, a corporate loan obtained under the pretense of business operations was misused to purchase a personal apartment. The NTS pledged active cooperation with foreign tax authorities to ensure proper investigation and enforcement. 'If the source of funds appears to originate overseas or raises money laundering concerns, we will request information from the relevant authorities to fully trace the funds and impose appropriate taxes,' Min said. He added that the agency would work to ensure local tax authorities take proper action if evasion is confirmed abroad. The NTS said that from 2022 through April this year, foreign nationals purchased 26,244 apartments totaling 7.97 trillion won, with both the number and value of transactions on the rise. Most purchases were concentrated in the greater Seoul area — Seoul, Gyeonggi Province and Incheon — which accounted for 81 percent of total transaction value and 62 percent of the total units bought by foreigners. Foreign investment in Seoul was heavily focused on the city's most expensive neighborhoods. About 61 percent, or 1.9 trillion won, of transactions were made in the Gangnam, Seocho and Songpa districts in southern Seoul, as well as Mapo, Yongsan and Seongdong in the north. In the top three districts, data show that three out of five foreign owners did not reside in their units, suggesting purchases were made for speculative purposes.
Time Business News
31-07-2025
- Business
- Time Business News
Procedures and Practical Considerations for Changing Business Address When a Shared Office Closes
When a shared office is used as the registered business address and the office closes, the business owner must update the business registration to reflect the new address. Failing to properly understand and complete the required administrative procedures can lead to tax-related penalties and administrative confusion. This article provides a systematic guide to the required processes, including filing with the competent tax office, reissuing the business registration certificate, and other practical matters, based on real-life cases of shared office closures. Cases of Shared Office Closures and Business Address Issues Recently, many startups, freelancers, and sole proprietors have been using shared offices as their place of business. However, when a shared office abruptly shuts down due to business reasons, businesses registered at that address must promptly secure a new business location and file a change of business address (Amendment to Business Registration) with the competent tax office. Neglecting this step may result in returned tax notifications, undelivered government documents, increased risk of tax audits, and other problems. Common Problems Arising from Shared Office Closure Returned mail such as tax bills Increased likelihood of being subject to a field audit by the tax authority Risk of having business registration revoked or classified as closed Disadvantages in certifications, licenses, and financial transactions Procedures for Changing Business Address at the Competent Tax Office When a shared office closes and a new business address is needed, the business owner must secure a new address suitable for conducting business and file an amendment to the business registration. The procedure is as follows: Secure a New Business Location The new location must be viable for actual business activities, and supporting documents such as a lease agreement are required. Prepare the Amendment to Business Registration Form This can be submitted either via the National Tax Service (NTS) Hometax website or in person at the competent tax office. The reason for the change should be clearly stated (e.g., 'Business relocation due to closure of shared office'). Prepare Supporting Documents Lease agreement (or Letter of Consent to Use Address) Original business registration certificate Identification document (if a representative files on behalf, a power of attorney and ID of the representative are also required) A copy of the business registration certificate of the closed shared office (if requested) Visit the Tax Office or File Electronically In-person filing: Submit all documents at the designated window Online filing: Use the Hometax portal's 'Change of Business Information' feature Reissuance of Business Registration Certificate A revised business registration certificate reflecting the new address will be issued immediately or within 1–2 business days. Key Administrative Checklist Address change must be reported within 20 days of relocation. Late filing may result in administrative fines and penalties. The new address must also be updated across all tax filings, such as VAT and income tax returns. Practical Points to Note Penalties for Delayed Address Change Reporting Delayed filing may lead to the tax office initiating an on-site investigation or revoking the business registration. Returned mail such as tax bills and official letters may result in missed payments and late filings. New Address Must Meet 'Actual Place of Business' Criteria The new location must be a legitimate place of business, with a valid lease agreement or similar documentation. Using someone else's address without authorization is illegal and can trigger audits or sanctions. Document Management: Lease Agreement and Others The lease agreement or Letter of Consent must be submitted as supporting documentation. Incomplete documentation can result in rejection of the amendment filing. Post-Change Notifications After Reissuance Notify banks, clients, licensing authorities, and other relevant parties of the address change. Failure to update records can result in restrictions on financial transactions or issues with permits and certifications. Documenting Closure of the Shared Office It is advisable to obtain official proof of the shared office's closure (e.g., Certificate of Business Closure). The tax office may require documentation to substantiate the reason for the change. Checklist for Administrative and Practical Procedures Secure new business address (lease agreement, etc.) Complete and file Amendment to Business Registration (via Hometax or in person) Prepare required documents (lease, previous registration certificate, etc.) Submit amendment and request reissuance of registration certificate Ensure reporting is within the 20-day deadline Notify financial institutions, business partners, and licensing bodies Obtain proof of shared office closure Frequently Asked Questions (FAQ) Q: What if I was unaware that the shared office had closed and did not update the address? A: If the tax office finds out through returned mail or a field visit that the business is no longer at the registered address, it may revoke your business registration or consider it closed. It is crucial to regularly monitor the status of your registered address and stay informed through notices from the shared office. Q: What if I don't have a lease agreement? A: You will need to obtain a 'Letter of Consent to Use Address' from the property owner and may be required to submit additional proof such as utility bills or payment receipts to prove actual use of the premises. Q: Where can I reissue my business registration certificate? A: You can apply for reissuance either at the tax office or through the NTS Hometax portal. On Hometax, use the 'Certificate Issuance' section to obtain a copy of your updated business registration certificate. Q: How should I handle VAT or income tax filings after the address change? A: Once the change is filed, all future tax filings must reflect the new address. Be sure to indicate the updated information clearly in your return documents. Q: What is the penalty for failing to report the address change on time? A: Under the Value-Added Tax Act and the Framework Act on National Taxes, a fine of at least KRW 50,000 may be imposed if the change is not reported within 20 days. Essential Legal and Real Estate Terms Amendment to Business Registration : An administrative procedure required when business registration details (e.g., address, representative, business type) change. : An administrative procedure required when business registration details (e.g., address, representative, business type) change. Lease Agreement : A contract serving as the legal basis for the use of the business location. : A contract serving as the legal basis for the use of the business location. Letter of Consent to Use Address : A document provided by the property owner authorizing the use of the location when a lease agreement is not available. : A document provided by the property owner authorizing the use of the location when a lease agreement is not available. Certificate of Business Closure : A document officially verifying that the shared office has closed. : A document officially verifying that the shared office has closed. Reissuance of Business Registration Certificate: A process to obtain an updated certificate reflecting changes to the business registration. Summary Checklist for Business Address Change Due to Shared Office Closure Confirm closure of the shared office Secure a new business location and sign a lease File the address change within 20 days Prepare supporting documentation (lease, etc.) Submit via the tax office or Hometax Obtain updated business registration certificate Notify banks, clients, and licensing bodies Retain proof of shared office closure By carefully following these procedures and precautions, business owners can avoid tax penalties and administrative complications in the event of a shared office closure. Understanding the relevant laws and administrative requirements is essential, and seeking expert assistance when needed is strongly recommended. TIME BUSINESS NEWS
Korea Herald
29-07-2025
- Business
- Korea Herald
Tax authorities launch investigation into Hybe amid insider trading allegations against chairman Bang Si-hyuk
National Tax Service probe follows recent police raid of K-pop powerhouse over alleged capital market violations Hybe, the entertainment giant behind K-pop phenomenon BTS, is now under investigation by the country's tax authorities, following a police raid last week over allegations that Chairman Bang Si-hyuk violated capital market laws. According to a local report Tuesday, National Tax Service officials were dispatched to Hybe's headquarters in Seoul to secure documents and financial records. The investigation is being led by the NTS' 4th Bureau of Investigation at the Seoul Regional Tax Office — a division typically responsible for special or irregular audits. Earlier the same day, the NTS announced in a briefing that it had launched tax probes into 27 individuals and entities suspected of stock market manipulation and tax evasion, with Hybe among them. The total scale of the suspected tax evasion is estimated at around 1 trillion won ($718.7 million). 'Unfair practices in the stock market have caused both domestic and global investors to lose confidence in Korea's financial system,' the agency said. 'This has deepened the so-called 'Korea Discount' and contributed to the nation's sluggish economic growth. We will thoroughly investigate tax evasion tied to capital market disruptions.' This marks the first time Hybe has faced a tax audit since 2022, when the Seoul tax office conducted a regular investigation and imposed a multi-billion-won penalty on the company. The new probe comes just days after police raided Hybe as part of a separate investigation into Bang. Authorities are probing allegations that Bang misled existing investors in 2019 by claiming the company had no plans for an initial public offering, only to later proceed with one. He is suspected of encouraging those investors to sell their shares to a private equity fund with which he was personally affiliated. According to South Korean financial regulators, Bang ultimately received 30 percent of the fund's resale profit following the IPO, allegedly pocketing roughly 190 billion won in unjust gains.
Korea Herald
21-07-2025
- Business
- Korea Herald
Traditional Korean eateries disappear while franchise brands see steady growth
Korean restaurant saw more closures than any other type of cuisine in 2024, with 2,233 shuttering in a year while Japanese and Western eateries continued to grow Traditional Korean restaurants are quietly vanishing across South Korea, even as global fascination with Korean food surges. Government data shows the share of Korean restaurants in the country has declined for six consecutive years, falling to 41.8 percent of all eateries in 2024, down from 45.6 percent in 2018. While Korean cuisine still accounts for the largest portion of dining establishments, its dominance is slipping. Meanwhile, Japanese, Western and Chinese restaurants, along with pizza, burger and fried chicken chains, are steadily expanding, according to the Ministry of Agriculture, Food and Rural Affairs. The sharpest drop has been among independent operators. As of May 2025, there were 410,429 registered Korean restaurant business owners, down 2,233 compared to the same month the year before, based on data from the National Tax Service. That means more than six closures a day, on average, over the past year. Many restaurant owners point to a mix of pressures: slower consumer spending, rising food and labor costs, and the growing dominance of delivery. The Korea Foodservice Industry Association explained that while some stews and dishes like jokbal (braised pig's feet) can work for delivery, most Korean cuisine doesn't travel well. 'Only franchise brands can afford the high delivery commissions,' a spokesperson added. According to the Ministry's 2024 survey, 74.7 percent of Korean restaurants had no delivery orders on an average day, and 78.4 percent said they do not use delivery apps. By contrast, 85.1 percent of fast food-style outlets such as pizza and sandwich shops reported using such apps regularly. As a result, more Korean restaurants are shifting to franchising. Newer entrants are increasingly opting for branded operations that offer centralized menu development, marketing and operational support. While the total number of food franchise brands in Korea fell slightly in 2024, Korean cuisine brands rose 4.1 percent to 3,701, according to the Korea Fair Trade Commission. Franchised Korean restaurant locations also grew by 3.7 percent, reaching 41,353. 'Even if traditional Korean restaurants are struggling, in the franchise industry, Korean food is now one of the top three sectors along with fried chicken and coffee,' said Kim Jong-baek, head of policy and communications at the Korea Franchise Association. 'It's hard for one person to maintain a clean kitchen, market their restaurant, and develop new dishes on their own. So now, many are turning to franchising.' He added that high-traffic tourist areas like Seoul's Myeong-dong are home to older, high-income Korean restaurant owners who are not representative of the average small operator. 'Those are top-tier businesses. They're not what we'd call mom-and-pop shops.'
Hans India
06-07-2025
- Business
- Hans India
South Korea: Record 1 million shop owners close businesses in 2024
The number of business owners that closed down their shops surpassed the 1 million mark for the first time in history last year, with the retail and eatery sectors accounting for nearly half, data showed on Sunday. According to the data compiled by the National Tax Service, 1,008,282 individual and corporate businesses filed for closure in 2024, up 21,795 from the previous year. It marks the first time business closures have topped 1 million since record-keeping began in 1995, reports Yonhap news agency. The tax agency said business closures have been on the rise since 2023, partly attributing the surge to what it called an "accumulated slump" during the COVID-19 pandemic and rising delinquency rates caused by high interest rates. The business closure rate has also been on the rise since 2023, reaching 9.04 percent last year, slightly up from 9.02 percent the previous year, according to the agency. The most cited reason for business shutdowns was slumping sales, which accounted for roughly half of the total. Retail businesses have been especially hard hit by the recent economic downturns, accounting for 29.7 percent of all business closures, followed by restaurant businesses at 15.2 percent, real estate at 11.1 percent, and wholesale companies and commodity brokerages at 7.1 percent. The business closure rate for retail businesses stood at 16.78 percent, followed by restaurant businesses at 15.82 percent and personal services at 14.11 percent. "Continued high interest rates and inflation have reduced real income, leading to declines in retail sales and spending in eateries," said Kim Kwang-seok, head of economic research at the Institute for Korean Economy and Industry. Meanwhile, South Korean stocks finished markedly lower on Friday, as investors took a breather following recent gains while watching developments in tariff talks with the United States. The local currency fell against the U.S. dollar. The benchmark Korea Composite Stock Price Index (KOSPI) fell 61.99 points, or 1.99 percent, to close at 3,054.28.
