Multiple e-liquid importers in South Korea shut down after tax evasion, with 170 billion won involve

According to a report by BreakNews on the 26th, South Korean National Assembly member Kim Sun-mi pointed out that some e-cigarette liquid importers cleverly avoided legal liability by shutting down their companies after evading taxes.

One e-liquid importing company located in Busan imported 335,000 liters of liquid into South Korea. Under the regulations, it should have paid 20.1 billion won in tobacco consumption tax and 920 million won in local education tax.

However, the company did not file an import declaration. Instead, it applied to close the business and completed liquidation registration in April 2021.

The Busan city government later learned of the import through the Korea Customs Service and collected 3.93 billion won in back taxes, but the company no longer had any corporate assets.

Before 2021, nicotine used in liquid vaping products was taxed only if it was extracted from tobacco leaves. Some companies falsely claimed that the nicotine they imported was extracted from tobacco stems or roots in order to evade taxes.

According to the “Status of False Reporting of Stem- and Root-Derived Nicotine in Liquid E-Cigarettes” provided by Democratic Party lawmaker Kim Sun-mi of the National Assembly’s Planning and Finance Committee, a total of 39 companies were found to have falsely reported nicotine that should have been taxed in 2021 as being extracted from tobacco leaves.

These companies imported a total of 2,995,763,522 milliliters of liquid e-cigarette products, with unpaid taxes reaching as high as 175.46 billion won. Among these 39 companies, 19 have already shut down, making it even more difficult to recover the overdue payments.