A company that operates a dining-out franchise was recently found to have quietly reduced the serving size of food sold per person at its stores. The company is suspected of using part of the revenue gained this way to shoulder 4 billion won in advertising and publicity expenses for a company run by the Oner family. The National Tax Service said on the 23rd that it has launched a tax audit to determine whether the company unfairly supported the Oner family through shrinkflation (reducing quantity while keeping the price unchanged).
The National Tax Service said it will conduct tax audits this month on 31 corporations that fueled high inflation and a strong dollar-won exchange rate. Those surveyed fall into four major categories: ▲ seven monopolistic corporations that engaged in price collusion ▲ four import corporations that improperly used tariff quotas ▲ nine franchise corporations that kept prices while reducing quantity ▲ 11 corporations that illegally siphoned off foreign currency. The National Tax Service said, "They are suspected of evading about 1 trillion won."
Corporations involved in price collusion are said to include manufacturers of apartment built-in and system furniture. One company was found to have leased a hotel it owns in the greater Seoul area to a company in which the Oner's child is the largest shareholder at below-market rates.
Corporations that received tariff quota benefits from the government and funneled profits to Oner family companies will also face tax audits. These corporations are suspected of inserting a company owned by the Oner's child unnecessarily into the distribution process to extract a kind of toll, or supplying materials and supplies that received tariff reductions to the Oner's child's company at low prices.
Among dining-out franchises, there are also cases in which the headquarters is suspected of unfair support by acquiring franchise outlets owned by the Oner family by paying a high premium. Another franchise headquarters is suspected of covering startup-related expenses such as franchise fees and interior remodeling expenses for franchise outlets whose owners are the chief executive.
In connection with the recent surge in the won-dollar exchange rate, corporations suspected of illegally siphoning off foreign currency will also face tax audits. Company B, an electronics manufacturer listed on the domestic stock market, is suspected of agreeing to receive royalties from an overseas production subsidiary at a fixed percentage of sales but actually receiving less than that. The National Tax Service believes that, due to this conduct, about 150 billion won worth of foreign currency did not flow into the country. The company's Oner family is also suspected of obtaining tens of billions of won in capital gains by acquiring a large amount of shares after receiving advance notice of an initial public offering (IPO).