Pernod Ricard hits back at tax fine claims

Pernod Ricard has rebuffed claims its Korean arm was fined £5 million by the country’s tax service, stating that there were merely “differences of interpretation” in relation to an audit, but that no tax evasion had taken place.

Reports in the Korean local media alleged the drinks giant had been fined 10 billion Korean won (£5m) by the country’s National Tax Service (NTS) in relation to claims that the company had inflated advertising and other costs to lower its profits and thus its tax liability.

However this afternoon the company released a statement rebuffing claims it had been involved in any inappropriate behaviour in relation to its tax affairs, but that it had paid a tax adjustment.

A statement from Pernod said: “The Korean National Tax Service has conducted a regular tax audit on Pernod Ricard Korea from July 2009 to July 2013. In the assessment there are differences of interpretation relating to some technical areas, however there are no cases of tax evasion or operating cost inflation in our accounting and financial statements, nor criminal liability related thereto.

“Pernod Ricard Korea has fully cooperated with the tax authorities throughout the audit and is following the correct protocol to address these matters.”

It added: “Korean Tax authorities never questioned the reality of these expenditures nor the operational nature of this spending which was fully incurred to develop our business in Korea.”

Pernod Ricard South Korea is headed by Jean-Manuel Spriet, who was in charge of Pernod Ricard UK until 2013.