Korean Air headquarters located in Gangseo-gu, Seoul. Hankook Ilbo DB
The National Tax Service launched a special tax investigation on Korean Air. It was reported as an investigation to find out whether the family members, including Hanjin Group chairman Cho Won-tae, are evading the inheritance tax. The industry does not rule out the possibility of acting as a variable as this survey is being conducted ahead of an M&A with Asiana Airlines.
According to industry sources on the 20th, the 4th Investigation Bureau of the Seoul Regional Tax Office sent investigators to the headquarters of Korean Air, located in Gonghang-dong, Seoul, to collect tax and accounting data and conduct face-to-face investigations. The four bureaus of investigation are mainly responsible for tax evasion investigations.
It is known that this investigation is related to the inheritance tax after the death of the late Hanjin Group chairman Cho Yang-ho. In 2019, Hanjin Group chairman Cho Won-tae inherited the shares of Hanjin Kal, former chairman Cho, and reported an inheritance tax of about 270 billion won to the National Tax Service.
Inheritance tax is a tax that, when survivors report inheritance tax, the National Tax Service checks the report statement to determine the amount of tax determined. If there is a lack of clarification about the details of the report and there is a suspicion of evasion, a tax audit is initiated. The Hanjin Group family plans to pay the inheritance tax in installments for the next five years under the annuity payment system. It is also known that last year, Chairman Cho Won-tae loaned 40 billion won in cash using Hanjin Kal’s shares as collateral to pay the inheritance tax.
The main target of this tax audit is not the Korean Air corporation, but the inheritance tax of the owner’s family such as Chairman Cho, but it is known that some charges have been caught regarding corporations. In fact, Korean Air has been criticized for not paying corporate taxes in a way that reduces profits by overcompensating depreciation expenses for the past 25 years. In addition, some are concerned that the M&A with Asiana Airlines will be affected if Korean Air’s illegal acts such as tax evasion are revealed in this tax audit.
A Korean Air official said, “This tax audit is intended to examine matters related to inheritance tax.”
Meanwhile, Korean Air received a regular tax audit in 2017. As regular tax audits for large companies are conducted every five years, Korean Air’s next regular tax audit is scheduled for 2022.
Ryu Jong-eun reporter [email protected]
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