Investigation on Fraudulent Sales of E-Liquid & Tax Evasion in South Korea

Regulations by 2FIRSTS.ai

Dec.22.2023

Investigation on Fraudulent Sales of E-Liquid & Tax Evasion in South Korea

South Korean police investigate companies suspected of fraudulently altering e-liquid components to evade taxes. Owner and advisor among suspects.

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.

References:

[1] "합성 홍보하고 천연으로"…전자담배 액상 업체 입건

Also Read:

[1] Korean Authorities Reveal List of Tax Evaders with Huge Debts

[2] South Korea Designates 5 New Drugs, Including Synthetic Marijuana and LSD

[3] Legal Action Taken Against Tax Lawsuit on E-cigarette Manufacturers in South Korea

[4] 39 Companies in South Korea Found Guilty of E-liquid Tax Evasion

#Law enforcement #E-liquids #Asia #Regulation #South Korea #E-cigarette Taxes

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