By Park Si-soo
The European Union Chamber of Commerce in Korea (EUCCK) is considering closing down, as it is unable to pay a hefty punitive tax.
Sources said some senior officials have talked about such an option following the taxation levied last month by the National Tax Service, adding that a decision will be made by September.
“The punitive taxation has thrown the EUCCK into a state of paralysis,” a source told The Korea Times. “With no resolution in sight, senior officials have become skeptical about its future.”
The source said the NTS has frozen all bank accounts registered to the organization as it failed to fully pay the tax due to a shortage of funds.
“With financial transaction completely halted, it’s extremely difficult for the EUCCK to have normal operations,” the source explained.
Hee added the EUCCK has come up with various ways to keep afloat, one of which is collecting financial donations from its member companies. It laid off 15 officials last month in a desperate cost-saving drive.
The worst time ever facing the EUCCK stemmed from a tax audit by Namdaemun District Tax Office between February and June. The office slapped a punitive tax of 4.5 billion won ($3.96 million) on the organization in July after deciding ranking officials evaded taxes and committed other tax-related irregularities.
Tax officials said the non-profit organization had evaded taxes on moneymaking activities, especially on profits from selling advertisements in its magazines and investment events organized for European companies here.
The EUCCK has paid 1.9 billion won, but 2.6 billion won remains unpaid due to a funding shortage.
An EUCCK official refused to comment on whether the organization admits to having broken the law, saying it was considering appealing to the courts to see whether the punitive tax was justifiable.
The official claimed the EUCCK is not liable for taxes, citing the nature of a non-profit entity. The official added, “If the EUCCK is closed for any reason, it will carry a huge negative impact on European companies here as well as business relations between Korea and the European Union.”
Established in 1986, the EUCCK is a key lobbying group representing some 800 European firms, including Audi, Volvo, Gucci, Louis Vuitton and Air France, which have a business presence here.