Woowa Brothers, the operator of the No. 1 delivery application Baemin in Korea, surpassed 5 trillion won in revenue last year and nearly 600 billion won in operating profit. Woowa Brothers did not pay dividends directly to the parent company last year. Instead, it was found to have transferred cash to the parent company by buying back and canceling 490 billion won worth of its own shares held by Singapore holding company Woowa DH Asia.
The National Tax Service suspects Woowa Brothers tried offshore tax evasion. It says the company may have attempted to transfer profits generated in Korea to overseas controlling shareholders without tax burdens. A National Tax Service official said, "We will check whether domestic corporations fulfilled withholding obligations under the Corporate Tax Act and tax treaties with foreign governments when paying income such as interest or dividends to overseas parent companies."
The National Tax Service said on the 14th it is launching tax audits of 41 entities, including Woowa Brothers, platform companies closely tied to people's daily lives, distributors of agricultural, livestock and fisheries products, and dining franchises. The National Tax Service explained, "These corporations are suspected of evading about 1 trillion won by inflating costs above actual levels and passing the price burden on to end consumers."
Fashion platform Musinsa and listed food company Pulmuone are among those reportedly under this tax audit. The National Tax Service believes Musinsa leveraged its position as the market share leader to impose high commission rates on onboarded sellers, thereby shifting the expense burden. Pulmuone is said to be suspected of abnormal accounting, including booking inflated costs.
Suspicions of tax evasion were also detected among food manufacturers and distributors of items such as eggs and sesame. According to the National Tax Service, Agricultural Corporation A, which produces eggs, is reported to have evaded tens of billions of won in revenue by demanding undocumented transactions from certain counterparties. The company is also said to have paid corporate funds in the 500 million won range as salaries to parents and spouses of the owner family who did not actually work. In addition, it was found to have allocated 200 million won in profits by supplying chicks at low prices to a related-party corporation.