Tax agency launches extraordinary audit into Coupang, its US parent company

A truck bearing the Coupang logo is seen at one of its logistics branches in Seoul, Wednesday. Yonhap

The National Tax Service (NTS) has launched an extraordinary tax probe into Coupang Corp., Korea’s largest e-commerce retailer, and its U.S. parent company, Coupang Inc., following a recent data breach, according to industry officials Monday.

The move comes amid the mounting pressure on Coupang Corp. and Coupang Inc., which have been criticized for failing to respond adequately to the leak of personal information affecting approximately 33.7 million customers.

The data breach, allegedly carried out by a former employee between June and November this year, came to light in late November.

According to the officials, the tax authority has mobilized two key bureaus from its Seoul Regional Tax Office. One bureau is responsible for investigating tax evasion, slush fund creation and other irregular tax activities, while the other oversees international transactions.

“About 150 investigators from the two bureaus were dispatched to Coupang’s Seoul headquarters and its logistics subsidiary, Coupang Fulfillment Services,” one official said.

The move is widely interpreted as a special tax investigation that goes beyond a routine audit. Although the formal targets are Coupang Corp. and Coupang Fulfillment Services, the NTS is effectively examining the e-commerce retailer’s overall business structure, particularly in relation to its U.S. parent company.

Another industry official said the involvement of the bureau handling international transactions suggests the investigation is focusing on the group-wide profit-shifting structure, with transactions involving the U.S. headquarters under particular scrutiny.

After the data breach was disclosed to the public, Coupang executives have been questioned at the National Assembly.

However, the company’s founder and de facto head Kim Bom-suk, also known as Bom Kim, refused to appear at the hearings, citing his role as a global chief executive rather than a Korea-based executive.

Under the circumstances, the ruling Democratic Party of Korea said Monday that it will hold additional hearings on Dec. 30 and 31 in cooperation with the Science, ICT, Broadcasting, and Communications Committee, the National Policy Committee, the Land Infrastructure and Transport Committee and the Climate, Energy, Environment, and Labor Committee.

Following the massive data breach, Coupang's daily active user count fell to 14.88 million as of Friday, according to MobileIndex, a data platform operated by industry tracker IGAWorks.

This marked the first time Coupang’s daily user count fell below 15 million since Oct. 25, when it recorded 14.91 million users.

The NTS declined to confirm the investigation, saying “We cannot verify any information regarding tax investigations of individual taxpayers or corporations.”