[Edaily Reporter Park Jung-Soo ] KOSDAQ-listed company Hyulim Networks(192410)announced on the 24th that, following a decision by the Tax Tribunal to re-investigate the case, the assessment of approximately 29.6 billion won in value-added tax (VAT) for the 2019–2023 tax years—which had been imposed by Investigation Division 4 of the Seoul Regional Tax Office—has been revoked.
Last year, tax authorities deemed ONEUL E&M’s travel business sales and purchases for the 2018–2023 period to be fictitious transactions and assessed a total of approximately 110.4 billion won in VAT and surcharges in three separate assessments. Of this amount, the first assessment—notified by the Seoul Regional Tax Office’s Investigation Division 4 on February 10 of last year—totaled approximately 29.6 billion won.
Following a decision by the Tax Tribunal on June 8 to order a re-examination, ONEUL E&M has been conducting separate re-examinations of the first assessment issued by the Seoul Regional Tax Office’s Investigation Division 4 and the third assessment issued by the Yeongdeungpo Tax Office. The company has now received final notification that the original first assessment has been revoked.
Consequently, the company explained that it has been able to partially resolve tax-related uncertainties, including the provision for liabilities of approximately 54.1 billion won that had been reflected in last year’s semi-annual report.
The remaining tax-related procedures are ongoing. The third assessment by the Yeongdeungpo Tax Office, amounting to approximately 50.7 billion won, is currently awaiting the results of the re-examination.
A lawsuit seeking to invalidate the second assessment by the Namdaemun Tax Office, totaling approximately 30.1 billion won, is currently underway. The company expects this decision to have a positive impact on future proceedings, as the second assessment involves tax issues related to the same tax period and transaction structure as the first assessment, which has now been revoked.
ONEUL E&M’s management stated, “The cancellation of the first assessment by Investigation Division 4 following this re-investigation is the most decisive first step in eliminating the tax risks that had been weighing on the company,” adding, “We will also work to resolve the remaining tax issues from the second and third assessments sequentially and at an early stage so that our corporate value can be reevaluated by the market.”