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NTS audits more than 30 pharmas about gift cards
by Eui Kyoung Yoon (ekyeun@dreamdrug.com)
Published : Nov 21, 2014 07:10:45
National Tax Service (NTS) started auditing at least thirty pharmaceutical companies about their expenses on gift cards for the past four years, sources said on November 19.

NTS wants those pharmaceutical companies to specify the uses of gift cards that were treated as expenses. It notified several dozens of pharmaceutical companies of audits and the companies looked perplexed with the notices.

If the companies are unable to show how they used those gifts cards, they need to pay 38% of the total expense for gift cards.

Pharmaceutical companies say it is impossible to specify the uses of gift cards in the past.

An executive member of one of the investigated companies said, “We may explain the latest uses of gift cards, but we can’t track them for the past four years. Some employees, who know about gift cards, left the company.”

Other executive said, “Most of gift cards were used for marketing activities. Although we know where they went, we can’t tell NTS to protect our clients.”

Industry experts expected most of the companies are likely to pay taxes as they can’t prove where gift cards went.
 
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