Kim Seon-ho Faces Tax Evasion Allegations Amidst Cha Eun-woo's Similar Controversy

Kim Ji-won's Kakaotalk
Today's story, candid and critical. TenAsia's reporter Kim Ji-won critiques the entertainment industry's issues with a discerning eye.

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Kim Seon-ho, who recently made a comeback with the Netflix series 'Can This Love Be Translated?' after overcoming personal controversies, is now embroiled in tax evasion allegations. This comes on the heels of similar accusations against his agency mate, Cha Eun-woo. With several upcoming projects lined up, all eyes are on Kim Seon-ho's next move.

On the 1st, allegations surfaced that Kim Seon-ho operated a family corporation for tax avoidance purposes. His agency, Fantagio, stated, "Kim Seon-ho is under an exclusive contract with Fantagio in his personal capacity and is diligently complying with all legal and tax procedures related to his current contractual relationship and activities."

They further emphasized, "There are no issues concerning Kim Seon-ho's contract and activities with Fantagio. The previously mentioned one-person corporation was not established for theater production or related activities." They added, "Since joining Fantagio, the corporation has not been active for over a year and is currently undergoing closure procedures in accordance with relevant laws and procedures."

However, Kim Seon-ho's explanation leaves room for doubt. Reports indicate that the corporation lists Kim Seon-ho as the representative, with his parents serving as internal directors and auditors. It is alleged that Kim Seon-ho paid his parents substantial monthly salaries from the corporation's funds, which they then transferred back to him. Additionally, his parents reportedly used the corporate card for personal expenses and entertainment. The corporation's registered address matches Kim Seon-ho's residence.

This situation is reminiscent of the recent tax evasion allegations against Cha Eun-woo. Cha Eun-woo established a corporation under his mother's name, which entered into a service contract with Fantagio for entertainment activities. However, the corporation did not provide actual management services and was primarily used for expense processing. The corporation's registered address was his mother's eel restaurant in Ganghwa Island, lacking any office facilities. Amidst the controversy, the corporation's address was changed from Ganghwa to Gangnam, Seoul. The National Tax Service identified this as a typical tax evasion scheme using a 'one-person agency' format and reportedly imposed a record-breaking tax penalty.

The use of 'one-person agencies' for tax avoidance is a recurring issue in the entertainment industry. Actress Lee Ha-nee also faced allegations of evading taxes amounting to 6 billion won. She established a corporation in 2015 and changed its name twice, serving as CEO and internal director until January 2023. Currently, her husband is the CEO, and Lee Ha-nee is an internal director. The National Tax Service imposed a 6 billion won penalty in September 2024 for treating her entertainment income as corporate income.

Celebrities often establish one-person agencies to maintain control over their activities, but also to reduce tax burdens. High-income entertainers face up to 45% income tax if settled personally, but using a corporate structure can lower the tax rate by over 20 percentage points. Establishing a corporation suggests a deliberate and intentional strategy rather than a simple mistake.

Kim Seon-ho, who reached the peak of his popularity with 'Hometown Cha-Cha-Cha' in 2021, faced personal controversy when a former girlfriend revealed conflicts during their relationship online. After a significant period, he made a comeback with 'Can This Love Be Translated?' in January. Just as he was about to complete his 'perfect comeback narrative,' another controversy has erupted. With numerous upcoming projects like TVING's 'Unfriend,' Disney+'s 'Hypnosis,' and tvN's 'The Minister's Protection,' failing to adequately address and dispel these allegations could lead to a decline in his public image once again.

Kim Ji-won, TenAsia Reporter bella@tenasia.co.kr