[Edaily Reporter Park Jung-Soo ] KOSDAQ-listed company Hyulim Networks(192410)announced on the 24th that the Seoul Regional Tax Office’s assessment of approximately 29.6 billion won in value-added tax (VAT) for the 2019–2023 tax years—which was based on a decision by the Tax Tribunal to re-examine the case—has been revoked.
Last year, tax authorities deemed ONEUL E&M’s sales and purchases in its travel business for the 2018–2023 period to be fictitious transactions and imposed 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 on February 10 of last year—totaled approximately 29.6 billion won.
Following the Tax Tribunal’s decision on June 8 to order a reexamination, ONEUL E&M had been conducting separate reexaminations of the first assessment issued by the Seoul Regional Tax Office 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 The company has now received final notification that the original first assessment has been revoked.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 of approximately 54.1 billion won that had been reflected in last year’s semi-annual report.
The remaining tax-related proceedings are ongoing. The third assessment by the Yeongdeungpo Tax Office, totaling approximately 50.7 billion won, is currently awaiting the results of the reinvestigation.
A lawsuit challenging the validity of the second assessment by the Namdaemun Tax Office—amounting to 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involves tax issues related to the same tax period and transaction structure as the first assessment, which has now been revoked.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 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 work to resolve the remaining tax issues related to the second and third assessments sequentially and as soon as possible so that the market can reevaluate our corporate value.”