Actor Lee Joon-gi has been required to pay an additional 900 million won in taxes. However, Lee Joon-gi has challenged this decision by the tax authorities and has filed an appeal with the Tax Tribunal.
According to a media report on the 19th, the Gangnam Tax Office in Seoul launched a tax investigation in 2023 against Lee Joon-gi and his agency, Namoo Actors.
During this process, the National Tax Service imposed an additional tax of 900 million won on Lee Joon-gi. Although he applied for a pre-assessment review, it was not accepted. He consequently filed an appeal with the Tax Tribunal to take legal action.
The background for the additional tax payment is as follows:
It was confirmed that the issue was related to transactions between Lee Joon-gi’s agency, Namoo Actors, and his personal agency, JG Entertainment, which he founded.
Lee Joon-gi established JG Entertainment in January 2014 and signed an exclusive contract with Namoo Actors in the same year. The contract was structured so that Namoo Actors would pay the performance fees to JG Entertainment instead of Lee Joon-gi personally. JG Entertainment recorded the performance fees as corporate revenue and paid corporate taxes accordingly.
However, the National Tax Service took issue with this arrangement. They pointed out that the invoices issued in the transaction between Namoo Actors and JG Entertainment did not reflect the actual substance of the transaction. They argue that the performance fees paid by Namoo Actors should be classified as personal income. Given that the top corporate tax rate is 24% and the top personal income tax rate is 45%, they have judged this as potential tax avoidance.
Consequently, the National Tax Service dismissed the corporate taxes JG Entertainment had already paid and reclassified the amount as personal income tax, adding a charge of 900 million won for Lee Joon-gi.
Lee Joon-gi’s side expressed their displeasure with this outcome.
A representative from Namoo Actors stated, “While Lee Joon-gi respects the tax authorities’ decision and has fully paid the amount, this decision contradicts the National Tax Service’s usual practices.”
They continued, “The Gangnam Tax Office insists that Namoo Actors should have paid the performance fees directly to Lee Joon-gi personally, but we complied based on the advice from tax accountants in accordance with existing tax practices.”
JG Entertainment was jointly established by Lee Joon-gi and his father, and both are listed as co-representatives.