The National Tax Service said on Feb. 9 that it assessed 178.5 billion won in back taxes, alleging that companies with monopolies or oligopolies in food products—including alcoholic beverages such as Oriental Brewery and items like ramen and ice cream—passed on improperly incurred expenditures such as rebates to consumer prices and underpaid taxes.
The National Tax Service said it conducted tax audits on 103 corporations suspected of tax evasion from September last year through last month and assessed 178.5 billion won in back taxes on 53 corporations. Of the amount assessed, 150 billion won was reportedly imposed on three large corporations in ramen, ice cream and soju.
Oriental Brewery, well known for its beer Cas, raised product prices by 22.7% over the past five years. During this period, it was found to have paid 110 billion won—16.4% of its advertising expense—as rebates to retail outlets. It was also said to have excessively paid more than 45 billion won in fees to related-party affiliates. The National Tax Service said, "The improperly paid rebate costs and the excessively paid fees were passed on to product prices."
Meanwhile, Company A, which sells ice cream, raised the prices of major ice cream products by 25% over five years. During this period, Company A was found to have excessively paid more than 25 billion won in logistics fees to related-party affiliates.
Meanwhile, Company B, which operates a memorial park, increased user fees by 20% over the past five years. However, a tax audit revealed suspicions that it evaded an amount equivalent to 97% of its annual sales. Company C was found to have inflated various expenses such as labor costs and service fees in its filings.