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Up close and personal: why Kook Hee Lee is the ‘go to’ guy in Korea

Then how could Kook Hee Lee provide such brilliantly fruitful service for foreign companies?

Lee has been forming Company Formation, Accounting, and Tax Service a TRINITY among numerous kinds of services that he is providing. That is, combination of these three core factors brought forth fruitful result consistently and reciprocally.

Firstly in forming the company Lee made it a customary practice to (1) communicate with potential clients, regarding business plans of the Korean companies, business activities for attaining the business goal, and suitable tax strategy and (2) present them on legal documents for court registration of the company formation and for Tax ID application for preventing any tax dispute afterwards.

Lee says it goes without saying that foreign clients are trying to search for faithful and competent CPA firms, and the potential clients can have confidence in him that they can be benefited from his services through the communications. That was why Lee could win new clients by 75% in average.

Second in Accounting Service we focus our attention on  (1) fair presentation of financial position and operating result on the financial reporting through thorough examination of accounting supporting data and reasonable account classification together with making NOTES of specific or unusual accounting transactions, if any, for attracting attention of the management from the respect of financial accounting.  (2) At the same time, we provide managerial accounting information for the managements to utilize them in controlling business and managerial activities, and enhancing operating result through the business growth

Third, in tax service we make thorough review of respective vouchers and supporting documents from the respect of their influence on taxation and preventing future tax disputes. At the same time, we strictly observe withholding liability of income tax on payroll and other service fees and filing VAT and Income tax return fairly and clearly. Besides, Lee advises the clients to maintain a minimum level of taxable income expected by NTS. NTS makes it a rule to take tax examination once every five years. But in case meeting with aforesaid requirements NTS does not take tax examination even passing over five years. Lee stresses that there was no tax examination among any of his foreign clients for over 30 years by the preventive measures as mentioned in the above.

The potential clients can have confidence in him that they can be benefited from his services through the communications. That was why Lee could win new clients by 75% in average. ( ordinary winning rate is said 25%-30%)

Then, lets see how Lee practiced CPA career: as a ‘Go to’ guy’ in Korea

Lee started his career in working for the Korea Electric Power Company on budget and cost control and established Standard Cost Accounting System for the whole business operation of the Company. This system was essential in cost control of the company. Lee says. “While I was with the company, I obtained my CPA accreditation”

Secondly Lee worked for Honam Oil Refinery Co. a joint venture with Caltex, as an internal auditor. Through this function Lee learned how internal audit improves the business operation of the companies.

Following his stint for a few years at a local accounting firm, Lee joined Anjin Accounting, a member of Ernst & Whinney, as international tax partner. During 1980s Lee learned international taxation thanks to positive and willingly support by Ministry of Finance (MOF) and NTS and it proved invaluable for his career, consulting on large contracts with customers such as Coca Cola, Reebok International, and Reynolds Tobacco, to name a few.

(1) Lee recalls: “One big US computer company, Seagate Technology, had business plan to set up a Korean subsidiary hiring 4,000 workers. So, I contacted MOF for obtaining approval of their investment and got their venture signed off by the Minister together with a five-year tax holiday. The CEO and CFO of Seagate were delighted that I’d been able to do that for them and so quickly”.

(2) Lee helped Reebok International importing shoes from Korea: “Reebok was a big business partner of South Korea in 1980s, with export value of $3 billion, one tenth of the whole export in those days. Lee withheld payroll income tax of its expatriates for 1.5 years by explaining the reason for withholding tax to the Director who was ignorant of the tax liability.

Besides, Lee participated in the joint study with two leading international law firms on forming a business entity favorable both to Korea and US of Reebok International. The study continued for over three months “I worked really hard on that account, submitting four-five pages every two-three days, working till 4 O’clock in the morning on a typewriter, as there were no computers. After a few months the Law firm advised an idea to set up a Korean subsidiary for exempting expatriates’ payroll income tax. The director of Reebok who was so much encouraged with the idea that he could not notice Lee’s mail denying the applicability of the idea.

Lee was embarrassed to see the disappointment of the director upon his finding uselessness of the advice at joint meeting with the Law firm. The director said to Lee “How can I give my thanks to you for the right advice. If not, I shall have to waste valuable time unlimitedly.

(3) Lee has set up a 100%-owned Korean subsidiary of R.J.Reynolds Tobacco for the first-time allowing distribution of foreign tobacco in Korea. Regardless of a law firm’s denial of Lee’s advice allowing foreign investment in tobacco sales in Korea the Legal Counsel and a few managements flew to Korea from UK and supported Lee in forming its Korean subsidiary. It goes without saying how much they were satisfied with and appreciated Lee’s correct information and service.

(4) Coca Cola Korea was another example: “At 1998 Olympic Games in Korea many companies paid large sums of money to IOC for promoting successful Games and Coca Cola was one of them. NTS said it was going to decline their donation because of perceived irregularities “Lee eventually succeeded in persuading in-charge director that it was a perfectly legal donation. Coca Cola was so much delighted and asked Lee advices afterwards on tax and business-related legal issues for longer than five years even after leaving Ernst & Whinney in 1990s.

Lee moved on again to Samhwa Accounting in middle of 1990s, arranged correspondent firm of Moore Stephens in1998 and changed its status as a member firm in 2000 and worked as international tax partner. During 2002 -2012 Lee set up numerous foreign companies mostly from the US and partly from Europe, Asia and Middle East and provided outsourcing services covering accounting, payroll and tax, and provided consulting on international taxation for member firms of Moore Stephens and their world-wide clients .

(5) Lee set up Korean subsidiary of Novo Nordisk, a famous Denmark pharmaceutical company producing medicine for diabetes and having world market share by 40% and provided accounting and tax advices. But the subsidiary was taken tax examination on Transfer Pricing, most dreadful to the taxpayers. But the examination was closed shortly in two weeks earlier than the planned period of one month and without paying tax even a Penny based on fair accounting records and maintaining a certain level of taxable income supported by Lee’s advices. Lee says It is not forgettable that the Australian president of Korean subsidiary at that time was so much excited with the unexpected satisfactory result of TP examination.

Lee says he has had many other interesting stories contributed himself to enhancing the benefits of foreign clients.

I am also joining AmCham, German, Finnish, and Israeli chamber of commerce in Korea for increasing more referral opportunities.

Now, Let’s summarize the strategic core factors brought forth successful CPA carreer to Kook Hee Lee.

In short, Lee could have achieved brilliant and successful CPA career based on (a) his excellent professional expertise, (b) support of university alumni, (c) freely contacting with, and willingly support by, the Government officials, and (d) personal talent to make close friends with strangers meeting in proceeding his tasks (given by grace of God in his understanding)

Lee also is enthusiastic in (1) studying world history, Korean, Chinese, Japanese, USA, UK, German history and some of Middle East countries and (2) reading diverse materials in order to be accustomed to changing trends of world economy and politics as well as science and technology ,the basis of the 4th Industrial Revolution. Samhwa Accounting is ranking No.10 in Korea and now growing by about 20% per year, which I’m very proud about.”

“I am also joining AmCham, German, Finnish, and Israeli chamber of commerce in Korea for increasing more referral opportunities. Elsewhere, until 2020 Lee was attending conferences across the globe as part of his ifa membership network and Moore Stephens. These have taken Lee to countries as far apart as the USA, Japan, Denmark, Italy, UK, Germany, Australia , South Africa ,Argentina and other countries “I love travelling and my wife always comes along. She is a well-known opera singer among the members of Moore Global. In Argentina, for example, she even sang at the Gala Dinner following the world conference in September 2012 responding to the request by the Conference President. it was a great success.”

I love travelling and my wife always comes along. She is a well-known opera singer among the members of Moore Global.

Lee and his wife wish to attend world conference of IR Global in October 2021. but worry if it would be possible because of COVID 19.

Topic III. Advantages of multinational clients expected from our company formation and outsourcing service

We , Samhwa Accounting, have been benefiting multinational clients remarkably based on our prominent expertise and long experiences over 30 years, and they have had strong conviction in our competent services.

Then how does Samhwa Accounting provide such prominent service ?

We are making (a) Company Formation, (b) Accounting, and (3)Tax Service, three core factors in our outsourcing services, as a TRINITY among numerous kinds of services that we are providing. That is, reasonable and systematic combination or harmonization of these three core factors of our service brought forth fruitful result consistently and remarkably for the benefits of our clints.

Firstly, in forming the company we ae making it a customary practice to (1) communicate with potential clients in detail for having full and correct understanding of business plans of their Korean companies, business activities for attaining the business goal, vendors of purchasing goods and / or services and distribution markets of the goods and services. Based on this fundamental information we are designing followings”.

  1. Correct presentation of business purpose and business  transacting channel on legal documents for company formation and application for tax ID for preventing any disputes afterwards from legal and tax respects.
  2. Designing tax strategies applicable to the specific business of Koran legal entities and communicating with the clients to agree with them
  3. Designing ideal accounting system and practice based on IFRS or K-IFRS and contrasting with existing accounting system of the company, and adjusting the designed systems and practice based on communication with the clients.

Secondly in providing accounting services

(1) Firstly,  financial report shall be prepared in a way to present  FAIRLY financial position and operating result of the Company and we focus our attention to protection of the company assets, prevention of tax disputes, and provision of analytical financial information for improvement of business operation

We are providing following services for attaining such goals

(1)       We are contributing to protection of company assets by focusing on reliability and reasonableness of accounting supporting data in their review in terms of internal control.

(2)       We prepare financial repot fairly  in terms of financial position and operating result of the company through reasonable classification of account titles

We  further correct undersanding of the readers and reviewers of financial report by preparing schedule of important accounts and making notes on them

(3)       Review of accounting supporting data, preparation of vouchers, book-keeping , and preparation of financial report  are performed by accounting staffs having long time experience in international services and affluent knowledge

under the continuous supervision and support of  the same partner fully knowledgeable in international services over the long period of time  and  particularly familiar with business operation of the Client

(4)       We contribute  to improvement of management of the company  by regular analysis of  specific accounts , being index in business operation and management such as gross sales margin ratio of goods sold, accounts receivable – trade,   inventories ,etc.

(5)       We are seeking correct interpretation of specific accounts based on IFRS and K-IFRS in the preparation of financial report and prevent distortion of financial report by removing personal prejudice

Third, in tax service we are making it a first goal to prevent tax disputes and tax examination by (a) advance thorough review of respective vouchers and supporting documents from the respect of their influence on taxation, (b) preparation of fair and clear VAT and income tax return supported by fair and concrete financial report, and (3) strictly observation of withholding tax liability on payroll and other service fee income. Besides, we advise the clients to maintain a minimum comparable level of taxable income expected by NTS in comparison to other companies in the same industries.

Korea NTS (IRS) makes it a rule to take tax examination once every five years. But in case meeting with aforesaid requirements NTS does not take tax examination even though passing over five years. We are stressing that there was no tax examination among any of our foreign clients for over 30 years except for one Danish company by taking such preventive measures in advance as mentioned in the above.  Korean subsidiary of a Danish pharmaceutical company was taken tax examination for transfer pricing , but the examination was finished far earlier than planned period of one month and without paying any penny of tax because of fair accounting practice and intentional maintaining some level of taxable income

It goes without saying that multinational companies are trying to search for faithful and competent CPA firms for their outsourcing services.  Our international tax service team leader ( partner )  Kook Hee Lee , stresses  that Samhwa Accounting can assure  multinational companies  of perfect company formation and faithful and competent  outsourcing services  and the foreign clients have proven the trustworthy of the assurance by enjoying great benefits and satisfaction from our services during last over 30 years

Contact information ‘

Kook Hee Lee , Partner, International taxation

Khlee30@samhwacpa.com

Mobile:  82-10—5338-6960

Office :  82,2,554,6960 / 2

Kook Hee Lee

Partner CPA, Samhwa Accounting

 

Connecticut’s Paid Family and Medical Leave Program’s Applications Are Now Open

In a press conference on December 1, 2021, Governor Ned Lamont, along with Connecticut Paid Leave Authority Chief Executive Officer Andrea Barton Reeves, announced that the Connecticut Paid Leave Authority is now accepting applications for Connecticut residents who want to participate in the state’s new paid family and medical leave program. Approved applicants will be eligible to receive benefits beginning January 1, 2022.

The Connecticut Paid Leave Authority expects 1,000 – 1,500 applications per day, and indicated the Connecticut Paid Leave Authority is prepared to handle that level of applications.

In its Human Resouces Toolkit, the Connecticut Leave Authority outlines the “process when a worker tells you they’re applying for CT paid leave.”

How Do Employees Apply for Leave?

The Connecticut Paid Leave Authority is partnering with the Connecticut Paid Leave Authority’s benefits administrator to oversee the administration of paid leave benefits claims. Employees may submit applications via the Connecticut Paid Leave Authority’s online portal, telephone, fax, mail, or email. Employees have 15 days from the initiation of a claim to provide all requested documentation and should, according to the state, know their approval status five days after completing the required paperwork.

Employees must notify their employers or their human resources departments at least 30 days prior to the start of leave for foreseen circumstances, and as soon as is practicable for unforeseen circumstances.

Employer’s Role in Application Process

As part of the paid leave application process, employees will need to ask their employers to complete an employment verification form. Employers must complete the employment verification form and return it to the Connecticut Paid Leave Authority’s benefits administrator within 10 days. Employers are also required to notify employees that they may be eligible for Connecticut paid leave benefits whenever they notify their employers of their intent to take leave.

If the Connecticut Paid Leave Authority denies an employee’s claim, the employer is not responsible for filing any documents on the employee’s behalf. Employees may file a request for reconsideration with the Connecticut Paid Leave Authority’s benefits administrator within 10 days of a denial.

Employers may require workers to use vacation days or paid time off before they receive Connecticut paid leave benefits; however, employers must allow employees to retain up to 2 weeks of paid time off while on Connecticut family and medical leave.

Payment

The state will make approved claim payments to employees two weeks in arrears either via a stored value card or by direct deposit. The Connecticut Paid Leave Authority will not issue paper checks.

Article by:
Nicole S. Mulé
Ogletree, Deakins, Nash, Smoak & Stewart, P.C.