South Korea warns of tax probes into private use of corporate supercars

South Korea's National Tax Service (NTS) is cracking down on the misuse of corporate funds for luxury vehicles, with Commissioner Lim Kwang-hyun issuing a stern warning against the private use of supercars registered under company names. The NTS is meticulously analyzing the acquisition, operation, and expense reporting of high-end corporate vehicles, vowing to conduct rigorous tax investigations if private use by owners or their families is confirmed.

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The National Tax Service is thoroughly analyzing the acquisition, operation, and cost processing details of high-end corporate vehicles. If private use by the owner's family is confirmed, we will conduct a strict tax investigation.

Commissioner Lim highlighted that some wealthy individuals have been purchasing multi-billion won supercars using company funds. These vehicles are then used for personal activities like family outings, golf, and visits to entertainment venues, with the associated costs being improperly treated as business expenses to evade taxes. Lim emphasized that using company money for personal luxury car expenses is akin to the state, and thus taxpayers, subsidizing a portion of those costs.

To combat such tax evasion, South Korea introduced a system in 2020 requiring corporate vehicles valued at over 80 million won (approximately $58,000 USD) to display distinctive green license plates. This measure initially led to a temporary decrease in the registration of high-value corporate cars. However, recent data indicates a concerning resurgence in these registrations, with the number of newly registered corporate vehicles costing over 100 million won increasing from 39,429 in 2023 to 51,542 in 2024, according to the Ministry of Land, Infrastructure and Transport.

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Some asset holders have been purchasing supercars worth hundreds of millions of won under the company name and using them privately for family outings, golf, and visits to entertainment establishments, while treating these as company expenses to evade taxes.

Lim noted that the green license plate, once a deterrent, is now perceived by some asset holders as a status symbol, further fueling the trend of purchasing expensive corporate-registered vehicles. He stressed that using supercars for private purposes while claiming them as corporate expenses is not merely a moral issue but a clear act of tax evasion. The NTS is committed to eradicating this practice, viewing it as essential for realizing tax justice and normalizing the system.

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Driving a supercar bought with company money and expensing it is like the state, and thus your taxes, bearing part of the cost.

This intensified scrutiny follows President Lee Jae-myung's inquiry during a State Council meeting on April 20, 2026, regarding instances of heirs using luxury imported cars for personal use. Commissioner Lim had then pledged to launch an investigation into the trend of using these vehicles, identifiable by their green plates, as a form of 'flexing' or showing off.

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Recently, the green license plate has rather come to be perceived as a symbol for asset holders with corporations, and the purchase of high-priced vehicles under corporate names is showing an increasing trend.