SEOUL : The Government of Singapore Investment Corporation, or GIC, is under scrutiny in South Korea for possible tax breaches.
The probe is over GIC's purchase of one of the country's most expensive properties, in downtown Seoul.
GIC says it is unaware of any investigation.
Star Tower, in the heart of Seoul's Kangam business district, is one of the largest office buildings in South Korea.
In December, GIC bought the 45-storey freehold building from US fund Lone Star for US$950 million, a record price for a building.
According to local media reports, GIC bought the building through two separate subsidiaries, one buying 50.01 percent and the other acquiring 49.99 percent.
By each avoiding the 51 percent stake mark, GIC saved about US$43 million in local property taxes.
The National Tax Service says it is looking into the massive transaction and is expected to release a report in late June.
Seoul's metropolitan government is waiting for this report before deciding on its next move.
Said Kwon Oh Do, director (tax collection department) of the Seoul Metropolitan Government, "We think we should levy at least the minimum amount of tax. Not all acquisition and registration taxes will be levied as if the transaction was a transfer of the ownership. But if the companies are considered majority owners then they will need to pay an acquisition tax, though not a registration tax.
"The amount will be minimal. Even though it's minimal, we think it will be appropriate to keep balance with domestic companies."
GIC, which has been expanding aggressively into the Korean property market since 1999, already owns six buildings in Seoul. - CNA /ct