South Korea's tax agency said Wednesday that it has collected some 40 billion won (US$35.8 million) in taxes from nonprofit organizations run by the country's conglomerates over their illegal wealth transfers.
|Corporate logos of South Korea's largest companies (Yonhap)|
The National Tax Service said they had not reported wealth transfer taxes to related authorities and even their holdings of stocks in affiliates that exceeded a certain level.
Currently, stock holdings are exempted from taxation if the stake in an affiliate does not exceed 5 percent.
Such organizations have been under fire for their roles in helping expand business group owners' control over various companies.
In December last year, the Fair Trade Commission (FTC) started an investigation into such organizations.
According to the FTC, 51 conglomerates subject to a slew of strict regulations had set up 165 foundations with average assets of 123 billion won by the end of 2016.
The corporate watchdog said that group founding family members, heads of affiliated companies and related parties took board seats at 138 foundations.
Sixty-six nonprofit organizations, or 40 percent, hold stocks in 119 companies affiliated with the conglomerates, accounting for 74 percent of stocks held by such organizations as assets.
Meanwhile, the government is moving to revise relevant laws to ban these organizations from wielding voting rights in group affiliates. (Yonhap)
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