Tax Investigation of Major Corporate GA Amidst Allegations of Tax Evasion

On September 23, 2024, the National Tax Service (NTS) initiated urgent tax investigations into two major corporate insurance agencies (GA) in South Korea.

On September 23, 2024, the National Tax Service (NTS) initiated urgent tax investigations into two major corporate insurance agencies (GA) in South Korea. The investigations are reportedly driven by allegations of tax evasion, with significant personnel from the NTS’s Investigation Bureau 4 involved. This sudden action has created a tense atmosphere within the GA industry, raising concerns over internal whistleblowing and compliance issues.

On the afternoon of September 23, the National Tax Service (NTS) dispatched approximately 20 investigators to two prominent corporate insurance agencies, referred to as Company A and Company B. The involvement of the Investigation Bureau 4 indicates that serious tax evasion allegations are under scrutiny, causing considerable unease in the GA sector.

According to reports from the insurance and GA industries, the investigators arrived unexpectedly at both companies, launching an in-depth examination of their tax practices. One insurance executive noted, “It has been confirmed that about 20 investigators from the NTS are conducting the audits, and it is believed that the investigation will continue until the end of the year.”

Sources suggest that both GA companies appear to be taken aback by the sudden nature of the audits, with claims that investigators seized computer backups and related documents in a manner similar to criminal investigations. 

In light of the previous regular tax audits conducted on these GA firms in 2020, some industry analysts speculate that the current investigations were prompted by the discovery of possible tax evasion signs by the NTS, necessitating immediate action.

A representative from one of the GAs stated, “Yes, there are approximately 20 NTS investigators at both firms, and we are cooperating by submitting all requested documents.” Another insider commented that due to the large number of investigators from the Investigation Bureau 4, this should be regarded as a special tax investigation. They further noted that investigators visited specific business units within Company A, collecting all relevant documents.

The consensus among industry observers is that these special audits may have been triggered by an internal whistleblower’s report, suggesting that significant allegations of tax evasion and embezzlement may have been identified.

The urgent tax investigations by the National Tax Service into the two major corporate insurance agencies have intensified scrutiny on their financial practices. As the investigations unfold, both firms are expected to face serious repercussions if any wrongdoing is confirmed. The GA industry is now on high alert, navigating the complexities of compliance amidst increasing regulatory oversight.