More Korean customers to sue Audi, BMW over tax refunds

Three additional Korean owners of major foreign auto brands will file lawsuits against their local units here, demanding they be compensated for unpaid tax refunds, their legal representative said Wednesday.

The three owners of the Audi or BMW vehicles will file the suits with the Seoul Central District Court, according to Barun, a local law firm that will represent the customers. The suits are intended to get compensation for what they claim are damages caused by the foreign brands' decision to not pay tax refunds related to their recent car purchases. 

This follows similar suits it filed for three customers earlier last month. Two Audi owners each demanded 900,000 won ($796) in refunds, while a BMW customer asked for 200,000 won.

"Following the earlier action, we have decided to file suits for three more customers," said Ha Jong-sun, a lawyer of Barun, adding he is sure he will win the case.

The government ended a 1.5 percentage-point excise tax cut on new car purchases at the end of last year. Once it expired, car sales dropped, which promoted the government in early February to extend the consumption-boosting measure until June.

The reduced tax rate should be applied retroactively to cars bought in January.

Major Korean carmakers followed the government policy by paying tax refunds to those who bought cars in January, but many foreign brands are refusing to follow suit.

They insist that the tax cut was already reflected in their promotional events, and they informed their customers of such facts. Some customers are claiming that they were not fully aware of them.

Barun said that it is planning to file a class-action lawsuit against foreign auto brands refusing to pay back tax refunds. More than 10,000 customers could be eligible for tax refunds under the government's changed tax policy, according to industry sources.

The law firm currently spearheads a separate class-action suit against Volkswagen in which customers seek compensation for being duped into buying its emission results-faked diesel vehicles. (Yonhap)