Korean stars' corporate structures under tax scrutiny; industry group calls for clearer guidelines and recognition of their business roles.
February/13/2026 12:11Related Groups & Members
Recently, amid allegations of tax avoidance surrounding the establishment of personal corporations by K-pop stars like ASTRO's Cha Eun-woo and Kim Seon-ho, a professional organization in the entertainment industry pointed out issues with the current system and called for improvements. The Korea Management Association (KMA) issued a statement on the 12th, expressing regret over the tax authorities' approach of uniformly viewing personal corporations of entertainers as means of tax evasion. KMA diagnosed that 'K-content has emerged as a leading player in the global market, and the industrial structure has rapidly changed.' They analyzed that the Korean entertainment industry, which has grown based on the one-stop management system of the 1990s, has expanded globally, and some artists' revenue structures have effectively reached the stage of 'corporatization.' They explained that establishing personal corporations for artists to manage their careers, intellectual property rights (IP), and long-term brand value is a natural flow accompanying industrial development. However, the current tax administration views these personal corporations as 'conduits (paper companies)' to avoid progressive income tax rates, leading to repeated post-collection actions. KMA pointed out that 'this is an example of the system and administration not keeping up with the changed industrial structure.' They emphasized that personal corporations are not merely 'shells' for tax management but engage in substantial management activities such as mental care for artists, long-term career management, IP development, content planning, and bearing liabilities from exclusive contracts. KMA analyzed that the repeated issues of post-collection stem from a 'lack of standards' rather than 'malice.' They argued that the reason why the National Tax Service's actions are repeatedly overturned in tax trials and administrative lawsuits is due to the absence of clear and predictable tax standards. In response, KMA suggested that the government establish clear tax guidelines recognizing the industrial substance of personal corporations, create predictable tax standards reflecting the substantial roles and risks of corporations, improve systems to promote transparent operations rather than focusing on enforcement and collection, and provide positive administrative interpretations that do not undermine the global competitiveness of the K-culture industry. Finally, KMA emphasized that 'K-culture is the future industry of the Republic of Korea and a national brand,' stating that if we judge the structure that has driven its growth solely through the frame of tax evasion, we will stop our own growth engine. KMA earnestly appeals to the public and the government to recognize the realities of the industry and improve the system.
Related Articles
HYBE has announced the second lineup of 10 artists for the 2026 Weverse Con Festival, taking place in Seoul on June 6-7. The lineup features a diverse range of K-POP artists from different generations, including Jejung and Apink, highlighting their significant contributions to the music scene. Fans can expect exciting performances from both established and emerging talents.
Yoon San-ha celebrated his birthday for the third consecutive year with a sold-out concert in Seoul, showcasing his unique music and heartfelt performances. The event featured a variety of songs, including fan favorites, and included a talk segment that connected him with fans. He expressed gratitude and excitement for future performances, including upcoming shows in Japan.
Netflix's new series 'Wonder Fools' is set to premiere in Q2 2023. The show, featuring characters who gain superpowers in 1999, follows their comedic battles against villains threatening their town. The cast includes Park Eun-bin and ASTRO's Cha Eun-woo, who is currently serving in the military. Amidst tax investigation rumors involving Cha Eun-woo, the production team urges restraint in speculation about the show's release date.
ASTRO's Cha Eun-woo will have a photo exhibition titled 'Afterimage' in Tokyo from April 28 to May 12. Although he is currently serving in the military and won't attend, tickets are available for 4000 yen. The exhibition showcases behind-the-scenes photos of his diverse activities. Cha Eun-woo has faced tax controversy but expressed his commitment to fulfilling his responsibilities.
ASTRO's Cha Eun-woo is reportedly under investigation for tax evasion, facing a 20 billion won tax bill linked to his personal corporation. His corporation, which has purchased significant real estate, is suspected of being a paper company to evade higher personal income taxes. His agency, Fantagio, stated they will clarify the legal issues involved.
To combat tax evasion and improve transparency in the entertainment industry, South Korean lawmakers are proposing a new law requiring agencies to report their operations annually. This comes amid controversies involving artists like Cha Eun-woo, who is under investigation for tax issues. The law aims to hold accountable those with criminal records related to tax offenses.
Yoon San-ha celebrates his birthday with the third installment of his concert series, 'SANiGHT Project #3', in Korea and Japan. The concerts will take place on March 21 in Seoul, April 10 in Osaka, and April 12 in Tokyo, allowing him to connect meaningfully with fans while reflecting on his journey and promises.
The release date for Netflix's 'Wonderfools,' starring ASTRO's Cha Eun-woo, is planned for Q2 2023, but no specific date has been confirmed. Netflix denied reports of a May 15 release, stating discussions are ongoing. The series features a comedic action adventure plot set in 1999, with Cha Eun-woo and Park Eun-bin in lead roles.
The Korean Taxpayers Alliance has raised concerns about a tax information leak involving ASTRO's Cha Eun-woo. They plan to report unnamed tax officials and the journalist who first reported the leak for violations of privacy laws and public secrets. The Alliance emphasizes the illegality of such leaks and calls for a thorough investigation by the National Tax Service.
Chanu's advertising model contract with LG U+ has concluded. He was under investigation for tax issues last year, resulting in a large tax bill. LG U+ stated the contract ended due to the completion of the term and has no plans for renewal. This situation has sparked considerable discussion in the entertainment industry.
