April 26, 2024

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[THE INVESTOR] Toyota Korea is currently being probed by the South Korea’s tax authorities for allegedly evading billions of won in taxes, according to local media reports on March 3. 

The Seoul office of the National Tax Service launched a tax audit into the local importer of Japanese automaker last November over suspicions that it manipulated its transfer prices of goods and services with the head office in Japan to evade corporate taxes. 

The NTS has looked into the tax record of Toyota Korea from 2013 to 2016 and revealed it has not paid any income tax, except for 380 million won (US$328,054) as a penalty tax in 2013. 

According to industry watchers, Toyota may be slapped with 50 billion won in additional taxes if the authorities confirm the tax fraud after the investigation. In the cited period, Toyota Korea posted 1.83 trillion won in sales. 

Mercedes-Benz Korea, local unit of German automaker, was ordered to pay 50.1 billion won in additional taxes in 2015, marking the largest amount a foreign automaker had to pay. 

The Toyota Korea spokesperson was not immediately available for comment on the matter. 

Founded in 2000, Toyota Korea runs 44 showrooms and 37 service centers across the country. It currently sells 17 models under its luxury Lexus brand and nine Toyota vehicles. Last year, its sales hit a record high of 19,859 units.

By Ahn Sung-mi (sahn@heraldcorp.com)