‘National Tax Service fear’ hits the entertainment industry

The National Tax Service has drawn its sword on famous celebrities. Actors Kim Tae-hee, Lee Byung-hun, Kwon Sang-woo, etc. were subject to a tax investigation by the National Tax Service. It is reported that they each paid hundreds of millions of won in fines. Some celebrities are using intelligent methods to evade taxes. The National Tax Service is creating justification for condemnation with a clear scenario.

According to investigative authorities and related industries on the 1st, high-intensity investigations have recently been conducted on a number of celebrities. Known figures include Kim Tae-hee, Lee Byung-hun, and Kwon Sang-woo. They are said to have received an 'irregular tax investigation' from the National Tax Service.

Irregular tax audits are usually called 'special tax audits'. The National Tax Service conducts regular tax investigations, focusing on countries 1 to 3. A regular tax audit is a survey that is conducted regularly every 4 to 5 years, and all companies and individuals are subject to investigation.

The 'special tax investigation' conducted by the four investigation bureaus is different. A special tax investigation is conducted regardless of the time when circumstances of tax evasion or evasion are revealed. Since this is an investigation that began after confirming the claims, the intensity and level are high. For this reason, the burden of a 'special tax audit' is different from a general tax audit.

The Seoul Regional Tax Office conducted a 'special tax investigation' into Lua Entertainment, founded by Kim Tae-hee and her older sister. Lua Entertainment is the entertainment company that Kim Tae-hee worked for until 2019.

As a result of the investigation, a fine of hundreds of millions of won was received. Initially, the investigative authorities began a tax investigation into Kim Tae-hee. Afterwards, it was revealed that the tax evasion circumstances of 'Lua Entertainment' related to Kim Tae-hee were detected, and the scope of the investigation was expanded.

However, regarding this controversy, Kim Tae-hee's side said, "The former agency and actress Kim Tae-hee herself reported and faithfully paid taxes on sales, but due to differences of opinion that sales should be regarded as the actress's own personal sales rather than the former agency's corporate entity, additional tax-related portions were paid. “I just did it,” he replied.

Lee Byung-hun also paid hundreds of millions in fines through a 'special tax investigation'. Lee Byung-hun's side explained, "The fine imposed was caused by the difference in the timing of advertising guarantee deposits and the normalization of accounting for the fact that bonuses paid to all employees at the actor's own expenses were treated as company expenses."

Kwon Sang-woo's side drew a line, saying, "This is not tax evasion or evasion." Kwon Sang-woo was accused of tax evasion by purchasing hundreds of millions of won worth of luxury vehicles through his company Su Company and reducing his net profits.

He continued, "There was a request from the tax authorities for explanation regarding the attribution time of profits and losses, and there were differences in some attribution times, so I filed a revised return and paid voluntarily. There were no omissions or evasions. Tax payments and refunds occurred at the same time, so the corrected return was filed. “It is,” he explained.

Everyone is citing 'problems in accounting processing' as the reason. It is said that tax evasion and evasion were not intentional. However, it is also true that hundreds of millions of won in fines were paid. This investigation is perceived as an incident caused by illusion and error. This is just an explanation that lacks justification for celebrities and entertainers who reap billions of won in profits every year.

Reporter Junho Yoon, Ten Asia delo410@tenasia.co.kr