By Kim Yoo-chul
The National Tax Service (NTS) is investigating Samsung Electronics, the Korean technology giant, over suspected tax evasion by its senior executives, sources said Thursday.
About 30 Samsung Electronics executives are targeted in the probe, which may eventually spread to other Korea Inc. heavyweights as tax authorities take a harder look at suspicions involving unpaid taxes, an NTS source said.
A Samsung Electronics official confirmed that company executives were being investigated.
NTS Commissioner Lee Hyun-dong earlier this month vowed to hit the country’s chaebol, or family-owned conglomerates, that allegedly have been beating the tax system in innovative ways, and unlawfully transferring more corporate wealth to their founding families.
``We will put particular focus on whether Samsung Electronics has made any illegally moves during its transactions with affiliates and parts suppliers, similar to the way conglomerates have created slush funds in the past, ‘’ said an NTS official, adding that firm’s transactions with its foreign clients will also be looked into.
``We will be deploying more senior experts than usual on this probe as we are very serious about the concerns involving tax evasion in the corporate sector.’’
Samsung Electronics, the crown jewel of the Samsung business empire, hasn’t undergone a formal tax investigation since 2007.
The Samsung spokesman downplayed the investigation as ``routine,’’ pointing out that the country’s biggest chaebol have normally been investigated every three to four years.
``It could be said that tax authorities are always looking into big businesses like fish in a tank,’’ he said.
The timing of the tax investigation is tricky. From the days of military rule to the 1990s, the government has often used tax probes to have local companies ``behave.’’
Undoubtedly, government officials will say that the days of politically-motivated tax investigations are over, but the emotional resistance remains obvious among business leaders.
This is why some speculate whether the probe has something to do with the harsh words of Samsung Electronics Chairman Lee Kun-hee about the government’s economic policies.
``Since this year, it’s mandatory for companies whose annual revenue is over 500 billion won to get a tax probe. Samsung is one of them,’’ said the Samsung spokesman.