The National Tax Service has initiated tax investigations into 41 companies closely linked to living costs, including agricultural products, processed foods, restaurant franchises, and delivery and fashion platforms, ahead of the Chuseok holiday. The suspected amount of tax evasion identified among these companies totals 1 trillion won.
On September 14, the National Tax Service announced that it is conducting investigations into businesses accused of inflating costs to pass price burdens onto consumers while omitting sales or falsely accounting for expenses.
The companies under investigation include 11 egg production farms, 12 agricultural import and distribution companies, 12 processed food manufacturers, three restaurant franchise headquarters, one delivery platform, and two fashion platforms.
In the case of egg production farms, allegations have emerged regarding unreported transactions and income reduction through sales dispersion. Some companies reportedly demanded transactions without invoices from their partners and concealed sales proceeds by receiving payments into non-business accounts. There are also indications that they supplied chicks at low prices to agricultural corporations run by family members or omitted local government subsidies from their reported income.
Investigations also include cases where fictitious poultry farms were created under spouses' names to split sales. The National Tax Service views this as an abuse of tax exemptions applicable to livestock income below a certain number of animals.
Among agricultural import and distribution companies, evidence has surfaced suggesting that customs benefits were exploited for personal gain. One company, which imported pork under a 0% tariff rate, is accused of inserting a ghost business under the name of the owner's child into the transaction process to pocket distribution margins before closing down shortly thereafter.
Another company importing sesame and other products reportedly secured additional low-tariff quota amounts through a shell company and dispersed sales. They are under investigation for inflating purchase costs by receiving false invoices without actual transactions, and for allegations that the owner's spouse misappropriated corporate funds to acquire an apartment.
Processed food companies are accused of distorting costs by covering expenses for related companies. One comprehensive food company reportedly included costs that should have been borne by domestic and foreign affiliates in its product costs while raising prices due to increases in raw material and logistics costs. There are also allegations of providing funds to overseas affiliates without receiving interest.
In the restaurant franchise headquarters, there are indications that personal expenses of the owners were processed as support costs for franchisees, or that direct management stores were transferred free of charge to corporations controlled by their children, with materials supplied at low prices.
Another franchise headquarters is under suspicion for failing to report supervisory fees and referral commissions received from interior contractors. The owner is also suspected of operating franchises under employees' names to disperse income and using a supercar acquired in the corporation's name for personal use.
For the delivery platform company, the investigation will verify allegations of providing free business support services to overseas affiliates and improperly claiming value-added tax deductions. Fashion platform companies are being investigated for sales omissions and for overpaying advertising and service fees to related companies or inflating costs by purchasing inventory at high prices.
The National Tax Service plans to focus on the appropriateness of production costs presented as the basis for price increases, the legitimacy of transactions with partners, and the wealth formation process of the owners during the investigation. If tax crimes such as income concealment through borrowed-name accounts, receipt of false tax invoices, or name lending are revealed during the investigation, the cases will be converted into tax violation cases.
* This article has been translated by AI.
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