Wine retailer caught underreporting 188,000 bottles to evade $1.4 million in taxes
Investigators found that three workers established a subsidiary in Germany to act as the retailer's wine exporter to circumvent Korea's online alcohol sales restrictions.
Various wines are displayed at a dessert fair at the Kintex convention center in Goyang, Gyeonggi, on Aug. 13. The image is unrelated to the article.
YONHAP
Customs authorities caught a wine retailer who allegedly evaded more than 2 billion won ($1.4 million) in taxes by underreporting the value of hundreds of thousands of bottles of imported wine, including from high-end labels.
Three workers of an online wine retailer were referred to prosecutors on charges of violating the Customs Act, the Seoul Regional Customs said on Wednesday.
The three are accused of importing some 188,000 bottles of wine worth 16.7 billion won while declaring their value to be around 11.6 billion won, roughly 70 percent of the actual transaction price. They ran the operation for about four years since March 2022.
Investigators found that the group established a subsidiary in Germany to act as the retailer’s wine exporter to circumvent Korea’s online alcohol sales restrictions.
The German subsidiary purchased wine locally and issued false invoices listing prices below the amounts actually paid. The retailer, headquartered in Korea, used those documents to declare the understated values to customs authorities, then sold the wine to consumers in Korea at regular prices.
Customs authorities believe that the three workers evaded about 2.4 billion won in customs duties and liquor taxes through the scheme.
The wines included bottles of the premium Romanée-Conti brand, priced at as high as 12 million won each.
Seoul Regional Customs uncovered discrepancies between the declared import values and actual transaction prices by comparing import declarations with domestic sales records. The agency then traced the company’s imports over the four years.
Authorities also seized the suspects’ assets, including real estate and bank accounts, as a precautionary measure.
The Seoul Regional Customs plans to collect a total of 4.1 billion won, including penalties, from the group.
Cho Jae-min, the head of the digital trade crime investigation division at Seoul Regional Customs, said that manipulating import prices through overseas subsidiaries is a crime that causes losses in state revenue and deceives consumers and importers who faithfully pay their taxes. Cho added that authorities would respond sternly to such practices.
BY JEONG JAE-HONG [kim.jiye@joongang.co.kr]
This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom.
