Taxation of slush fund is now the focus in SK chair’s divorce case
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If tax authorities officially classify the funds as illicit, it could further expose the clandestine financial dealings that took place during South Korea’s Sixth Republic.
Both business circles and governmental sources reported on Wednesday that National Tax Service (NTS) Commissioner nominee Kang Min-soo reignited the issue during a parliamentary confirmation hearing. When asked about the potential taxation of the 90 billion won ($65.2 million) fund revealed during the high-profile divorce case, Kang stated, “We need to review the statute of limitations and relevant laws. If the statute still applies and the funds are verified, they must be taxed.”
Roh Soh-yeong claims that 30 billion won was transferred to SK in the early 1990s, based on a memo by her mother, Kim Ok-suk. The court inferred that this money likely constitutes a part of former President Roh’s slush fund, making it a central issue in the division of the couple’s assets that are valued at approximately 1.38 trillion won. The memo was a crucial piece of evidence leading to this substantial asset division.
Democratic Party lawmaker Kim Young-hwan emphasized during the hearing that the fund in question appears to be illegal money that has now been brought to light and urged the NTS to take decisive action.
While Roh Tae-woo’s slush fund is believed to exceed 400 billion won, only about 268.2 billion won has been verified and confiscated to date. Should the memo’s documented funds be confirmed as illicit, it may be subject to the potential taxation period provision. According to the National Tax Basic Law, if a taxpayer evaded inheritance or gift taxes using fraudulent means, taxes can be levied within a year from the date the authorities become aware of the evasion. If the court’s recognition of the memo on May 30th, 2024, is taken as the starting point, the NTS could feasibly exercise its tax collection rights. Given that the slush fund dates back over 30 years, some experts caution that uncovering and proving its illegality within a short period could be challenging.
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