It has been revealed that the National Tax Service imposed a shocking amount of taxes through tax audits of celebrity agencies over the past five years.
According to data received by Assemblyman Park Min Kyu from the National Tax Service on the 15th, there were 104 tax audits conducted over the past five years targeting companies registered as popular culture and arts planning businesses with the Korea Creative Content Agency, resulting in additional taxes of ₩69.0 billion KRW (about $45.9 million USD).
The number of tax audits by year were 22 in 2020, 18 in 2021, 22 in 2022, 15 in 2023, and 27 in 2024. The additional tax amount increased 7.8 times over four years, from ₩3.90 billion KRW (about $2.60 million USD) in 2020 to ₩30.3 billion KRW (about $20.2 million USD) in 2024.
There were also 54 cases where the audited entities filed appeals against the tax assessments: 12 pre-assessment reviews, 35 requests for adjudication, and 7 lawsuits. The number of appeals rose from 4 cases in 2020 to 19 in 2024, and the claimed amounts increased from ₩8.10 billion KRW (about $5.39 million USD) in 2020 to ₩30.3 billion KRW (about $20.2 million USD) in 2024.
Assemblyman Park argued that since tax disputes and tax evasion controversies repeatedly arise with each audit, it is necessary to verify whether the taxation standards properly reflect the unique characteristics of the industry.
The current “Popular Culture and Arts Industry Development Act” operates a registration system for planning businesses that provide or arrange services for popular culture artists. However, the criteria for business operations, such as conditions for establishing one-person celebrity agencies and revenue distribution structures, are not clearly defined.
The tax authorities believe some one-person celebrity agencies operate without clear corporate substance or as means to avoid high income tax burdens. Assemblyman Park pointed out that this perspective has hardened, leading to a fixed cycle of additional tax imposition and disputes.
On the other hand, the entertainment industry argues that additional taxation is imposed after the fact without clear standards for evaluating the industry’s unique revenue settlement structures and cost processing methods. The National Tax Service stated, “The competent authorities should establish concrete guidelines for reasonable market value assessment standards (such as settlement ratios).”
Assemblyman Park explained, “There is a need to establish clear tax standards that reflect industry characteristics to encourage honest tax payment. We are also reviewing measures such as imposing additional corporate tax on individual corporations that meet certain conditions.”