[News Today] Tax probe into Coupang launched

[LEAD]
Korea's tax authorities have opened a special audit into Coupang.

It's focusing on both its domestic business and money flows with its U.S. parent company to determine whether any offshore tax evasion occurred.

The probe is widely seen as targeting Chairman Kim Bom-suk, who is currently based in the United States.

[REPORT]
The National Tax Service has begun a tax probe into Coupang Fulfillment Services, or CFS.

It's a key subsidiary that operates logistics centers and warehouses nationwide.

The special tax probe began after the NTS had reportedly found evidence of tax evasion at CFS through a preliminary data analysis.

Some 150 NTS officials are working to seize relevant materials.

"What kind of materials have you found? Are they related to offshore tax evasion?"

What's particularly noteworthy is the departments overseeing the probe.

In addition to the 4th investigation bureau of the Seoul Regional Tax Office, its international transactions investigation bureau has also been deployed.

It means the authorities will look not only into the company's domestic operations, but also offshore transactions, such as financial transactions with the U.S. headquarters.

Under Coupang's governance structure, the U.S.-based Coupang Inc. owns Korea's Coupang Corp. 100%, while Coupang Corp. fully owns CFS.

As all three are financially one entity, the NTS is zeroing in on the possibility of profit sharing under the tax law whereby CFS's profits may have been delivered upward.

This means CFS's tax evasion allegation could expand to Coupang Inc., which is at the top of the governance structure.

Some say the tax probe actually targets Coupang Inc. CEO, Kim Bom-suk.

Hwang Jung-a / Science and Broadcasting Committee (DP, Dec. 17)
Isn't Kim Bom-suk the top decision-maker in Coupang's operations in Korea?

Harold Rogers / CEO, Coupang (Dec. 17)
He is the chairman of Coupang Inc. of the United States company.

The Democratic Party has decided to hold Coupang hearings for two days in a row, on Dec. 30 and 31.

Kim has yet to say whether he will attend.

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