Actor Lee Jun Ki has been hit with a ₩900 million (approx. $620,000 USD) tax reassessment, but he is challenging the decision through legal means.

On March 19th KST, reports revealed that the Seoul Gangnam Tax Office conducted a tax audit on Lee Jun Ki and his agency, Namoo Actors, in 2023. Following the audit, the National Tax Service (NTS) determined that Lee owed additional taxes, leading to a reassessment.

Lee Jun Ki initially filed a pre-assessment review, but it was rejected. As a result, he has appealed to the Tax Tribunal to contest the ruling.

The dispute stems from transactions between Namoo Actors and JG Entertainment, a private agency established by Lee Jun Ki.

• In January 2014, Lee Jun Ki founded JG Entertainment and later signed an exclusive contract with Namoo Actors.

• Instead of paying Lee directly, Namoo Actors transferred his appearance fees to JG Entertainment.

• JG Entertainment reported the earnings as corporate revenue and paid corporate taxes accordingly.

The NTS deemed the transactions irregular, arguing that:

• The payments should have been classified as personal income rather than corporate revenue.

• The corporate tax rate (maximum 24%) is significantly lower than the personal income tax rate (maximum 45%), which could indicate tax avoidance.

• The tax invoices issued between the two entities did not reflect the actual nature of the income.

As a result, the NTS voided the corporate tax paid by JG Entertainment and reclassified the income as personal earnings, leading to an additional ₩900 million tax liability for Lee Jun Ki.

Lee Jun Ki and Namoo Actors maintain that the reassessment is unfair and inconsistent with past tax practices.

• A Namoo Actors representative stated: “Lee Jun Ki respects the decision and has paid the full amount, but this ruling contradicts the existing tax practices.”

• They further emphasized that they had followed tax regulations based on professional accounting advice and had faithfully reported their taxes.

• Additionally, JG Entertainment is jointly owned by Lee Jun Ki and his father, making the company a legitimate business entity.

As the legal battle unfolds, Lee Jun Ki is awaiting a final decision from the Tax Tribunal.

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