KOR
A tax appeal filed by actor Yoo Yeon-seok against the National Tax Service (NTS) was recently dismissed, following the imposition of approximately 3 billion won in back taxes.
Yoo had requested a review, claiming that the imposed taxes were excessive, but his request was rejected.
The controversy surrounding Yoo's tax penalties began in March of last year.
Following a tax audit of the one-person agency established by Yoo, the NTS concluded that the agency did not provide substantial operational support and slapped him with over 7 billion won in back taxes.
Objecting to the decision, Yoo filed a pre-assessment review. After double taxation was recognized, the tax amount was significantly reduced to around 3 billion won in April of last year.
Although Yoo paid the full amount of these taxes, he subsequently filed a tax appeal.
About a year after the appeal was filed, the Tax Tribunal sided with the NTS, and Yoo's side expressed its intention to fight the decision once again.
His agency, King Kong by Starship, released a statement saying, "This is simply a difference in the interpretation of tax laws, and the process is not over yet," which is interpreted as an indication that they will likely proceed with an administrative lawsuit.
Similar cases have also emerged.
Actor Yoo Jun-sang was hit with hundreds of millions of won in back taxes in 2023 and filed a tax appeal, which was dismissed last year.
Singer and actor Cha Eun-woo received a notice for over 20 billion won in income tax penalties in January of this year. After going through a pre-assessment review and paying the adjusted amount of over 13 billion won in full, he filed an appeal with the Tax Tribunal last month.
Lee Joon-gi and Cho Jin-woong are still currently undergoing tax appeals regarding back taxes amounting to around 900 million won and 1.1 billion won, respectively.
Actor Lee Ha-nui also filed a tax appeal in April of last year over approximately 6 billion won in taxes, but the Tax Tribunal unusually referred the case back for a re-deliberation, meaning a conclusion has not yet been reached.
Tax issues related to one-person entertainment agencies continue to face scrutiny, with analysts pointing out that the root cause lies in expedient methods used to lower tax burdens.
While the corporate tax rate tops out at 24 percent, the personal income tax rate reaches up to 45 percent, meaning individuals can significantly reduce their tax burden by channeling personal income into corporate revenue through a one-person agency.
As a result, the NTS is currently zeroing in on one-person agencies operated by celebrities.
Authorities are scrutinizing not only the revenue of these one-person agencies but also their expense reporting. Whether corporate expense deductions reflect actual operational costs or constitute ambiguous expenditures has become a recurring point of contention during tax audits.
This has been Kang Kyung-youn from SBSi.
Reported by Kang Kyung-youn | Video by Jung Yong-hee | Graphics by Jung Joo | Produced by SBS Digital News
※ Please note: This article was translated by AI and may contain errors.
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