Investigation on Fraudulent Sales of E-Liquid & Tax Evasion in South Korea
According to a report by the South Korean SBS website, the Korean police have initiated an investigation into several companies suspected of fraudulently manufacturing and selling e-liquid. These companies allegedly altered the main components of e-liquid and engaged in tax evasion. The police have filed a case for violation of tobacco business laws against company A, a e-liquid retailer, as well as its collaborating supplier and consultant Mr. B, among five suspects.
The main ingredient of e-liquid, nicotine, can be divided into natural nicotine and synthetic nicotine. Currently, A company is accused of fraudulent behavior, allegedly selling natural nicotine disguised as synthetic nicotine.
According to current regulations, the sale of natural nicotine is subject to tobacco consumption tax, with a corresponding tax rate of 1,799 Korean won per milliliter. However, synthetic nicotine is not classified as tobacco and is therefore exempt from taxation. The police suspect that the aforementioned company is using this rule to evade taxes and is currently conducting a thorough investigation.
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