South Korea’s tax agency said Tuesday that it is investigating 10 mid-sized domestic companies on suspicions they evaded taxes in transferring wealth from owners to their children through funds in tax haven countries.

According to the National Tax Service, the companies are suspected of evading taxes in the process of wealth transfer by selling shares of their affiliates at well below their market value to the funds that were created under the children’s names.

The companies under investigation include those in electronics, machinery, clothing and shipping industries. Their annual sales range from 100 billion won ($87.7 million) to 500 billion won, the NTS said. Two of them are listed on stock markets.

The move comes as the tax agency has been beefing up the crackdown on offshore tax evasion and illegal wealth transfer among the wealthy and those in the corporate sector.

“We are strengthening overseas information-gathering efforts for suspicious companies and conducting in-depth investigations based on the data in order to prevent wealth transfer without due tax payment,” an NTS official said.

The NTS said that it is also investigating about 40 other wealthy citizens for not informing authorities of their overseas accounts that hold 1 billion won or more.

The agency added that it is looking into their detailed financial transactions to see if they have intentionally concealed the accounts in order to evade taxes. 

(Yonhap News)