Table of Contents
- Why Agency-Assisted Registrations Carry Risk
- Common Fraudulent Practices
- IITP Audit Red Flags
- Consequences of Non-Genuine Registration
- How to Verify Agency Legitimacy
- Safe Practices
- FAQ
1. Why Agency-Assisted Registrations Carry Risk
IITP recognition for corporate research labs is in high demand due to the significant tax benefits. Some agencies promise quick registration by inflating researcher credentials or listing phantom researchers — exposing companies to criminal liability.
2. Common Fraudulent Practices
- Listing employees with no research background as "researchers"
- Using researchers from other companies temporarily
- Creating fake research plans that do not reflect actual R&D activities
- Registering a "research facility" that is just a storage room
3. IITP Audit Red Flags
- Researcher doesn't know their research project when auditors ask
- Research space has no equipment appropriate to the stated research
- Research expenditure records don't match the registered activities
- Researcher employment records show they were hired only briefly before registration
4. Consequences of Non-Genuine Registration
- IITP recognition cancelled
- Tax credits claimed must be repaid with interest and penalties
- Criminal charges for tax fraud are possible
- Company flagged for heightened scrutiny in all future applications
5. How to Verify Agency Legitimacy
- Check if the agency is a licensed administrative scrivener office (행정사 사무소)
- Request references from past clients
- Avoid agencies that promise results without reviewing your actual R&D activities
6. Safe Practices
- Only register researchers who are genuinely employed and conduct R&D
- Document all research activities with dated records
- Have a licensed administrative scrivener prepare the application honestly
FAQ
Q. Can we retroactively fix a registration that was done improperly?
A. In some cases, voluntary disclosure and correction is possible. Consult a specialist before an audit finds the issue.
Q. Are all agencies risky?
A. No. Licensed administrative scrivener offices operate under professional regulations. The risk is with unlicensed brokers.
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