Although he is signed to Namoo Actors, Lee Joon-gi established a one-man agency called JG Entertainment in 2014. Lee’s appearance fees for his projects were then paid to JG Entertainment and reported as corporate revenue. As such, these appearance fees were subjected to South Korea’s corporate tax rates and not the country’s personal income tax rates.
In South Korea, the highest corporate tax rate is 24 per cent while the highest personal income tax rate is 45 per cent.
Namoo Actors added: “The key issue during the investigation was whether the transaction of tax invoices between us and JG Entertainment was legitimate, and whether the income should be regarded as corporate tax for JG Entertainment or personal income tax for Lee Joon-gi. Other than the difference in perspective, no other matters related to tax evasion or tax avoidance were pointed out during the investigation.”
Despite having already paid the 900 million won in full, Lee has filed an appeal.
In a statement, Lee’s representatives said: “We fully respect the decision of the tax authorities. However, we have filed an appeal to the Tax Tribunal as this matter was never pointed out during the previous regular tax audits in 2015 and 2019. We are aware that there is no existing precedent regarding the practice of managing income and assets through a personal corporation.”
