Korea’s biggest tax debtor agrees to pay after 15 years

Cido Shipping Chairman Kwon Hyuk, charged with offshore tax evasion, has agreed to pay 393.8 billion won ($294 million) in overdue taxes after leaving them unpaid for 15 years, the National Tax Service said Wednesday.

The country’s biggest individual tax debtor paid 100 billion won in cash in July and put up five vessels overseas as collateral for the remaining balance, which he plans to pay in installments.

The tax agency said the ships appeared to be worth more than what Kwon still owed. Officials did not say how much they were worth or when he would finish paying.

NTS Commissioner Lim Kwang-hyun said the 100 billion won payment was the largest ever collected from a taxpayer with overdue taxes. The previous record was about 50 billion won.

Kwon and three related companies are listed as owing a total of 790.2 billion won in overdue taxes. Some of that debt was counted twice because the companies were also held responsible for his unpaid taxes. Once Kwon pays the full amount he owes, the company debts will also be cleared.

The case began with a tax investigation in 2011, when tax authorities found that the shipping tycoon owed taxes as a Korean resident despite claiming to live abroad. He took the case to court, but the Supreme Court ruled against him about two years ago.

The NTS said its efforts to track down his overseas assets helped persuade him to pay. It worked with tax authorities in Liberia and Panama, where many of his ships are registered.

The agency said it agreed to accept overseas ships as collateral for the first time after finding no assets in Kwon’s name in Korea. It has asked the Board of Audit and Inspection for guidance on the arrangement.

Lim said Kwon had been offered no leniency in any criminal proceedings in exchange for paying his taxes. The agency will decide whether to lift a travel ban on him after assessing the ships’ value and receiving guidance from the state audit board.