On the 27th, the prosecution referred JW Pharmaceutical and its CEO to trial on charges of evading corporate taxes of over 1.5 billion won by disguising rebate expenses as employee welfare expenses.
The Seoul Central District Prosecutors' Office's Tax Crimes Investigation Unit (Director General Lee Jin-yong) noted that they had indicted JW Pharmaceutical and Shin Young-seob without detention on charges of violating the Act on the Aggravated Punishment of Specific Crimes (taxes) and the Punishment of Tax Crimes Act.
JW Pharmaceutical is accused of evading approximately 1.56 billion won in corporate taxes from 2016 to 2018 by including around 7.8 billion won in unclear funds, including rebate expenses for doctors, as deductible expenses (recognized as expenses under tax law).
It was investigated that the company disguised the expenditure of rebate expenses as employee welfare expenses by using canceled credit card receipts and credit card receipts of individuals not employed by the company.
Rebates refer to acts where a pharmaceutical company unfairly provides money and other compensation when its drugs are adopted.
This case was previously transferred to the prosecution by the Seoul Metropolitan Police Agency. The Seoul Western District Prosecutors' Office, which received the case, had earlier referred JW Pharmaceutical to trial for the provision of rebates, and the Seoul Central District Prosecutors' Office indicted a doctor who received rebates from the company last year.