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Most drugmakers failed to prove gift card expenses
by Eui Kyoung Yoon (ekyeun@dreamdrug.com)
Published : Dec 10, 2014 03:51:36
Most of pharmaceutical companies couldn’t meet the deadline for sending required documents about the expenses of gift cards for the past 4 years to National Tax Service, sources said on December 8.

Those companies were supposed to send the documents by early November. As they failed to prove what gift cards were used for, NTS has started its tax audits on a certain drugmakers.

NTS seems to think that most of the gift cards were spent for kickbacks, considering collecting 40% of those expenses as unpaid taxes from those companies.

Some companies consider legal battles against NTS, but the lawsuit can be also risky as it should reveal how gift cards were distributed.

An official of a pharmaceutical company said, “I know one company tried to file a lawsuit, but it gave up because it could do more harm than good while going through the lawsuit. It is likely that those companies who consider lawsuits will eventually give up that idea.”
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