The European Union Chamber of Commerce in Korea said on Friday it decided to shut down after it was slapped with fines and overdue taxes worth 4.5 billion won, and launch as a new organization in cooperation with the Korean tax office.

“What the EUCCK has been doing was very important, so it will be replaced by a new institution in the coming weeks,” Andre Nothomb, EUCCK vice president and head of Solvay Korea, told The Korea Herald.

“It will have a new name but the same objective for the members. Some part of it will be for profit and some for nonprofit. We will start from a blank sheet, with close cooperation with the tax office.”

Ninety-five members including EUCCK president Jean-Luc Valerio voted Thursday on closing the organization which has about 830 European companies doing business here as members.

The EUCCK was registered as a foreigners’ organization when it was established in 1986, but became an unregistered group in 1999 as the related law was revised.

“There were some ambiguities in accounting, so we decided to shut down after discussions,” a EUCCK official was quoted as saying.

The Namdaemun District Tax Office of the National Tax Service conducted a tax inquiry on the EUCCK for three months starting February and informed the group to pay 2.6 billion won in overdue value-added taxes and 1.9 billion won in fines for not issuing tax invoices.

Although the EUCCK is a nonprofit organization, it should pay value-added taxes for income earned through profit-seeking activities in Korea such as receiving fees for running advertisements in its magazine, the NTS said.

The EUCCK’s claim that it didn’t have to pay the taxes since the advertisement fees were used to publish the free magazines sent out to member companies was not accepted by the tax authorities.

The EUCCK paid the 1.9 billion won in fines, but did not pay the taxes, prompting the authorities to freeze its accounts.

The EUCCK said it was going to pay the overdue taxes as it takes steps for liquidation.

According to the members who attended the meeting on Thursday, the EUCCK’s accounting was not transparent due to its ambiguous status as “an organization perceived as a corporation.”


By Kim So-hyun (sophie@heraldcorp.com)