On Friday 8th Feb. I saw the news that Hyundai Motor Group – the royal family did not pay the gift tax during Lee Myung-bak government, by poor rules of Ministry of Economy and Finance.
I found the even news article : http://www.lovesbeauty.co.kr/news/articleView.html?idxno=42813
In 2011, Korean Ministry of Economy and Finance(KMEF) revised the Gift Tax Act to prevent casting all orders to one within Chaebol(Royal) family’s companies. Basically if the sales volume is over 30% within family companies, they should pay gift tax.
But finally KMEF excluded “oversea sales” from taxation for encouraging export. Additionally, “goods” is added into the final Act so the range of taxation was decreased.
Because of that, Hyundai did not pay KRW 20,800,000,000(USD 19 million) for gift tax, although Hyundai traded with Hyundai Glovis which is the family company. The original gift tax was KRW 23,800,000,000(USD 21 million).
If the revised Act did not includes the word “goods”, Hyundai vice president Mr. Jeong should pay up to KRW100,000,000,000 (USD 91 million). It means Korean government gave a favor to Hyundai royal family.
Even now small/middle companies in auto parts business field in Korea have been being bankrupted, except the major companies such as Hyundai. Very upset new for us.