Lee Jun Ki's Tax Controversy

In a surprising twist, beloved actor Lee Jun Ki is embroiled in a significant tax controversy, facing a hefty ₩900 million (approximately $620,000 USD) tax reassessment. The star is not backing down and has launched an appeal against this steep ruling.

Investigation by the National Tax Service

Recent reports on March 19th KST revealed that the Seoul Gangnam Tax Office conducted a thorough audit on both Lee Jun Ki and his agency, Namoo Actors, in 2023. As a direct result of this scrutiny, the National Tax Service (NTS) concluded that Lee Jun Ki owed additional taxes, prompting the reassessment.

Initial Contest and Appeal

Initially attempting to contest the NTS’s findings through a pre-assessment review, Lee Jun Ki was met with rejection. This setback led him to escalate the matter all the way to the Tax Tribunal, where he hopes to overturn the controversial ruling.

Issues with Financial Dealings

At the heart of this dispute are the financial dealings between Namoo Actors and JG Entertainment, a private agency that Lee Jun Ki founded in January 2014. His relationship with Namoo Actors involves signing an exclusive contract, but instead of directing his payment as an actor through conventional means, Namoo Actors opted to route his appearance fees through JG Entertainment. This practice allowed JG Entertainment to classify the earnings as corporate revenue, subsequently paying corporate taxes.

NTS Findings on Income Classification

However, the NTS discovered what they believe are irregularities in these transactions. They assert that payments made to JG Entertainment should have been categorized as personal income rather than corporate earnings. The NTS argues that doing so resulted in tax avoidance, as the corporate tax rate—capped at 24%—is notably lower than the personal income tax rate, which can reach up to 45%. Furthermore, the tax invoices issued between the two firms allegedly misrepresented the true nature of the income generated.

Reclassification and Tax Liability

In light of the NTS's findings, the agency has reclassified the income as personal earnings rather than corporate, which has led to Lee Jun Ki's sudden and unexpected tax liability of ₩900 million.

Response from Lee Jun Ki and Namoo Actors

Despite these allegations, both Lee Jun Ki and representatives from Namoo Actors are adamant that the reassessment is unjust and inconsistent with previous tax practices. A spokesperson for Namoo Actors defended the actor, stating, "Lee Jun Ki respects the decision and has paid the full amount, but this ruling contradicts the existing tax practices." They further emphasized that the agency acted in accordance with professional accounting advice and consistently reported their taxes accurately.

Ownership of JG Entertainment

Adding another layer to the case, it's important to note that JG Entertainment is held in joint ownership by Lee Jun Ki and his father, reinforcing its legitimacy as a business entity.

Impact on Lee Jun Ki's Career

As this legal saga unfolds, fans are left wondering how it will impact Lee Jun Ki's career and reputation in the industry. The actor is now eagerly awaiting a ruling from the Tax Tribunal, while many speculate about the implications this tax dispute may have on his future projects. Stay tuned for updates on this developing story!